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| UK house price fall 'at a record' | |
| (41 minutes later) | |
| UK house prices showed their biggest annual fall since the Nationwide began its housing survey in 1991. | UK house prices showed their biggest annual fall since the Nationwide began its housing survey in 1991. |
| The 8.1% annual decline came after house prices dropped by 1.7% in July, the building society said. | The 8.1% annual decline came after house prices dropped by 1.7% in July, the building society said. |
| The average home now costs £169,316 which is nearly £15,000 cheaper than in the same month last year. | The average home now costs £169,316 which is nearly £15,000 cheaper than in the same month last year. |
| The Nationwide survey found that house prices have fallen for nine months in a row and were at their lowest level since August 2006. | The Nationwide survey found that house prices have fallen for nine months in a row and were at their lowest level since August 2006. |
| Property prices were still £11,000 higher than three years ago, the survey found. | Property prices were still £11,000 higher than three years ago, the survey found. |
| "The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly," said Fionnuala Earley, Nationwide 's chief economist. | "The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly," said Fionnuala Earley, Nationwide 's chief economist. |
| Sellers were remaining reluctant to accept lower offers, which along with lack of availability of mortgages was pushing down house purchase activity. | |
| 'Belt tightening' | 'Belt tightening' |
| Ms Earley said that consumers are tightening their belts in the current climate. | Ms Earley said that consumers are tightening their belts in the current climate. |
| But she added that swap rates - the key driver of mortgage rates - had fallen slightly, which had allowed new fixed rate mortgage deals to come down in cost. | But she added that swap rates - the key driver of mortgage rates - had fallen slightly, which had allowed new fixed rate mortgage deals to come down in cost. |
| "As the cost of mortgages begins to come down, activity could be bolstered and restore some liquidity to the housing market," she said. | "As the cost of mortgages begins to come down, activity could be bolstered and restore some liquidity to the housing market," she said. |
| "However this is not expected to happen overnight." | "However this is not expected to happen overnight." |
| If oil prices continued to fall, this could increase the possibility of rapid cuts in interest rates, which she described as good news for borrowers. | If oil prices continued to fall, this could increase the possibility of rapid cuts in interest rates, which she described as good news for borrowers. |
| Ms Earley said that sharp rises in food and fuel prices were having a "double edged" effect of pushing up inflation while slowing the economy by squeezing disposable income. | |
| This would also point to an eventual interest rate cut by the Bank of England's Monetary Policy Committee, she said. | |
| Mortgage changes | |
| The figures come shortly after the Bank of England said that the number of new mortgages approved for house purchases in June was at its lowest level since 1999. | |
| The number of home loans approved in June fell to 36,000, down from 41,000 in May, the Bank said. | |
| But the National Housing Federation said that it was expecting house prices in England to rise by 25% by 2013. | |
| It said that the number of new homes being built was not keeping up with rising demand as a result of people living longer, getting married later and getting divorced more. |