House Price Falls Have Accelerated Further

According to the Nationwide Building Society, the rate of house price falls has accelerated further, dropping by 2.5% in May alone.

However the building society say borrowers are better placed to weather the storm than in previous periods of instabilty, such as in the 1990s, as tighter credit conditions should help the longer term sustainability of the market.

Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said: "The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market.

"Prices fell by 2.5% during the month, the largest recorded monthly fall in the history of the Nationwide monthly index.

"At seven months, this is also the longest consecutive period of monthly falls since 1992," she said.

Prices have fallen 4.4% since this time last year, the biggest annual fall in house prices since December 1992 when prices were falling at an annual rate of 6.3%.

"The price of a typical house is now £173,583 - £8,000 less than this time last year. "However, the strength of house price growth - up until last year - means that prices are still 5% higher than two years ago and 10% higher than three years ago." said the Chief Economist.


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