House price fall 'slows down'

Published: Thursday, 27 November 2008, 7:31AM

House prices are still on the way down but the rate at which they are falling has "eased significantly", a survey has found.

Nationwide Building Society said the average cost of a home dropped by just 0.4 per cent this month, compared with a slide of 1.3 per cent in October.

At the same time, the annual rate at which prices are falling eased to 13.9 per cent, compared with a year-on-year drop of 14.6 per cent a month earlier.

It is the first improvement in annual house price inflation since October last year, when the year-on-year rate at which prices were rising first began to decline.

The average home now costs £158,442, £25,000 less than a year ago, but still £25,000 higher than in November 2003.

Fionnuala Earley, Nationwide's chief economist, said: "In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market.

"The labour market is weakening, which will inevitably hinder market demand, particularly when property remains expensive relative to earnings.

"With prices falling at their current rate, there is also little incentive for new borrowers to hurry into the market."

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