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House prices fall again in August, says Nationwide | House prices fall again in August, says Nationwide |
(about 3 hours later) | |
House prices fell for the second month in a row in August, according to the Nationwide building society. | House prices fell for the second month in a row in August, according to the Nationwide building society. |
Prices fell 0.9% last month, following a 0.5% decline in July, Nationwide said, adding that it was the first time that prices had fallen for two consecutive months since February 2009. | Prices fell 0.9% last month, following a 0.5% decline in July, Nationwide said, adding that it was the first time that prices had fallen for two consecutive months since February 2009. |
The average house price now stands at just over £166,500. | The average house price now stands at just over £166,500. |
Nationwide said house prices had "essentially stagnated over the summer". | Nationwide said house prices had "essentially stagnated over the summer". |
The quarter-on-quarter rate of change - generally seen as a smoother indicator of recent price trends - fell from 1.2% in July to 0% in August. | The quarter-on-quarter rate of change - generally seen as a smoother indicator of recent price trends - fell from 1.2% in July to 0% in August. |
"As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices," said Martin Gahbauer, Nationwide's chief economist. | "As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices," said Martin Gahbauer, Nationwide's chief economist. |
But he added: "Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development." | But he added: "Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development." |
The annual rate of house price inflation fell sharply from 6.6% in July to 3.9% in August. | The annual rate of house price inflation fell sharply from 6.6% in July to 3.9% in August. |
'Two-tier' | |
The figures reflect the general levelling-out of the housing market shown in data recently. | |
Mr Gahbauer said that more sellers had returned to the market, giving buyers more choice and more bargaining power. | |
Others in the industry suggest that the market had been accelerating at the end of last year, despite the economic downturn. | |
"There was a major disconnect between the property market and the economy. House prices rose at a rate that was simply unsustainable and a degree of correction was always on the cards," said Richard Hatch, of property consultancy Carter Jonas. | |
"At the higher end, however, prices are proving far more resilient and demand continues to be strong, more evidence of the formation of a two-tier market. | |
"We do not expect two months of consecutive declines to be the beginning of a sharper downward price trend. The market is simply readjusting after getting ahead of itself. The market is stabilising, not collapsing." | |
Although falling prices would be welcomed by first-time buyers, their attempts at getting on the property ladder are being challenged at present by large deposits being demanded by lenders. | |
Howard Archer, chief economist at IHS Global Insight, said he expected prices to fall by between 3% and 5% in the second half of 2010, followed by a 5% drop next year. |
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