Nationwide tracks 10.5% house price fall

28/08/2008

House prices have dropped by 10.5 per cent in the past year - with the average UK property now costing £19,000 less than it did in August 2007.

The new Nationwide survey shows that the typical price has declined by a further 1.9 per cent this month.

A double-digit annual fall has not been registered by the lender since the early 1990s.

Many homeowners are now facing the threat of falling in to negative equity, with the value of their mortgages exceeding the value of their homes.

Nationwide's chief economist, Fionnuala Earley, commented: "Recent activity levels in the housing market have been very subdued.

"House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year, in spite of a big increase in the use of sales incentives."

Kevin Still, EuroDebt director, added: "For many home owners with less disposable income available and high levels of unsecured debt the option of withdrawing equity to fund day-to-day living costs and consolidate debts is becoming even more difficult.

"Lower property valuations and limited secured products at the higher end of the loan-to-value range mean that re-financing is not a viable option for many and reinforces the need to look at alternate solutions to generate more household income, reduce monthly expenditure or negotiate with their creditors."

Tags; Housing Debt and Bills,

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