THE average house price fell 0.7 per cent in October, equivalent to a drop of £2,376, Britain’s biggest building society said yesterday.
Nationwide building society said the value of the average home is now £164,381 compared to £166,757 a month ago.
Over the last three months house prices have fallen 1.5 per cent, marking the largest decline since April 2009, according to Nationwide.
If prices continue to fall, the annual rate of house price inflation would drop to between 0 per cent and -1 per cent at the end of the year, Nationwide said. It compares to a rate of growth of 5.9 per cent at the end of 2009.
Martin Gahbauer, Nationwide’s chief economist, however cautioned against gloom saying the fall in house prices was still well below the five to six per cent quarterly falls seen during the second half of 2008.
He did however call for the resumption of quantitative easing (QE) saying “on balance” it was reasonable to expect that a resumption of QE would provide “some offsetting support to the housing market.”
Economists said that the latest figures seemed to confirm that it was no longer a question of whether house prices would fall but by how much.
Howard Archer, chief European and UK economist at Global Insight, said: “Latest housing market data and surveys have been consistently weak, and the housing market really does not seem to have got much going for it at the moment.”
In a separate report, the Home Builders Federation claimed the average first-time buyer now needed to save a deposit of just over £37,000 to buy an average priced starter home of £155,000.