Nationwide, the UK’s biggest building society, has reported that house prices have fallen by almost £3,000 in September bringing the average home price down to just £161,797.
September figures show prices falling for the 11 month in a row as the average price now is 12.4% lower than this time last year. In September 2007, the median price for a home in the UK was approximately £185,000 says Nationwide. However with failing banks like Northern Rock leading to tigher lending conditions throughout the year, the credit crunch has stolen £23,000 of the average price.
Despite almost daily bad news about the market, the building society believes the market could be stabilising. According to Fionnuala Earley, chief economist at Nationwide, the past few months have shown a similar rate at which prices are falling and quarterly falls are beginning to settle.
Earley said, “The situation in September 2008 could hardly be more different. House prices are falling, activity has contracted sharply, fewer than 20% of first-time buyers are borrowing above 90%, and the Bank rate has fallen to 5% and is expected to fall to 3.5% by the end of 2009.”
Although Ms Earley is trying to offer optimism in a climate of uncertainty and economic turmoil, she asks: “The big question is how far will prices correct and how long before they begin to recover.”
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