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UK house prices see sharp tumble UK house prices see sharp tumble
(40 minutes later)
UK house prices saw their biggest fall in 12 years during November, mortgage lender Nationwide has said.UK house prices saw their biggest fall in 12 years during November, mortgage lender Nationwide has said.
The firm's data showed that the cost of an average home slid by 0.8% from a month earlier - the first drop in price seen since February last year.The firm's data showed that the cost of an average home slid by 0.8% from a month earlier - the first drop in price seen since February last year.
On an annual basis, house prices rose by 6.9% from the same month in 2006, down from October's figure of 9.7%. The annual rate of house price inflation now stands at 6.9%, down from 9.7% reported in October.
The data "confirms that the housing market is indeed cooling," Nationwide's chief economist Fionnuala Earley said.The data "confirms that the housing market is indeed cooling," Nationwide's chief economist Fionnuala Earley said.
"Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market," she added."Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market," she added.
The 0.8% slide in prices seen in November is the biggest since June 1995. The 0.8% slide in prices seen in November is the biggest reported by the Nationwide since June 1995.
Earlier this week, Land Registry figures suggested that London house prices dropped at their fastest rate in more than two years during October. According to the building society's calculations, the cost of the average property in the UK is now £186,044, nearly £12,000 more than this time last year.
'Recession unlikely'
All indicators now suggest that house sales are going through a sharp downturn, while house price inflation is slowing quickly.
New mortgage approvals have slumped dramatically, according to the UK's biggest banks, while surveyors have a seen a continuing drop in enquiries from would-be buyers this year.
Even parts of the country that seemed immune from the general deflating of the market have now been affected.
This week, the Land Registry reported that house prices in England and Wales were rising at a rate of only 8.1%.
Crucially, it suggested that prices in London, which until now had been shooting ahead of the national average, had started to slow as well.
However Ms Earley said an outright recession in the property market was unlikely.
"With interest rates on the way down and the continued issue of undersupply of housing in the UK market, the underlying fundamentals are perhaps more positive than the recent swings in sentiment might suggest," she said.