House prices begin to fall as slowdown bites

The UK's housing market has begun to respond negatively to the continuing economic slowdown and in the aftermath of the September 11 terrorist attacks on the United States.

According to the latest figures from the Nationwide house prices fell by 0.5 per cent in October. However, with an average house price of £91,653 this October, prices are still 13 per cent higher than a year ago.

Last month, the building society reported a price surged of 2.8 per cent, the best in over eight years.

While the report acknowledged that the housing market is entering a slowdown, it based its view on declining confidence, job losses and reducing bonus payments in London, especially those in finance and banking.

The report concluded by saying that the Nationwide still expects house prices to rise next year, but at a more sustainable rate. (MB)