Property prices experience downturn

The Nationwide House Price Index revealed that house prices fell by 0.8 per cent in November, with the annual rate of increase also falling to 6.9 per cent.

As a result, average house prices in the UK fell to £184,099, the lender suggested, decreasing from October’s total of £186,044.

Commenting on the findings, Fionnuala Earley, chief economist at Nationwide, admitted that the recent market turmoil had led to a market downturn which would carry over into 2008.

She said: “November’s data confirms that the housing market is indeed cooling in line with the weakening in housing market drivers. Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market.

"House purchase approvals, a good barometer of real market demand, have weakened from a peak of 128,000 a month in the final months of 2006 to 102,000 in September. We expect this activity to continue to fall back throughout the rest of this year, and into the next.”

In similar findings, the Bank of England suggested that the 12-month growth rate in total net lending to individuals fell to 9.7 per cent, with the October findings reaching £8.8 billion, below the September findings.

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