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UK house prices see annual fall UK house prices see annual fall
(10 minutes later)
House prices in the UK have recorded their first annual fall for 12 years, according to the Nationwide.House prices in the UK have recorded their first annual fall for 12 years, according to the Nationwide.
Prices fell by 1.1% in April, the sixth monthly decline in a row, and were down 1% from the levels seen in April 2007, the building society said.Prices fell by 1.1% in April, the sixth monthly decline in a row, and were down 1% from the levels seen in April 2007, the building society said.
Nationwide said the price falls reflected a weakening market which had been hit by "poor affordability and tighter financial market conditions".Nationwide said the price falls reflected a weakening market which had been hit by "poor affordability and tighter financial market conditions".
An average home now costs £178,555, the company said. An average home now costs £178,555 which is £1,759 lower than April 2007.
'Cautious consumers'
"April was another difficult month for the housing market," said Fionnuala Earley, Nationwide's chief economist.
She said that there had been a "steep decline" in house buying in the last six months owing to falling demand from first-time buyers, higher mortgage rates and tighter lending criteria.
The rise in unsold property on the market improved the bargaining power of buyers which pushed down prices.
She said that this was likely to have a knock-on effect on the wider economy, with consumers becoming more cautious.
But rising oil and food prices meant that the Bank of England would "prefer to cut rates at a more gradual rate than homeowners might prefer", she predicted.