House prices fall for the third month in a row

House prices have fallen for the third consecutive month according to the latest data from Nationwide Building Society.

House prices fell by 0.1% during the month, taking the average cost of a home to £180,473.

Nationwide said the annual rate of price growth fell to 4.2%, which is the lowest rate since December 2005.

Nationwide said that demand for property may be at it’s lowest and a key factor to look out for during 2008 is how much pent-up demand returns to the house market and whether this translates to increased sales.

Buy-to-let
Concerns over the buy-to-let market were also addressed with Nationwide saying that they expect buy-to-let to weaken in 2008, however, do not believe that the long-term fundamentals of buy-to-let are necessarily as poor as recent commentary may suggest.

Main Points
- House prices fell by a modest 0.1% in January, the third consecutive monthly decline
- The annual rate of house price inflation edged down from 4.8% to 4.2%
- Housing market conditions have loosened further, but there are tentative signs that demand may
have bottomed out

Commenting on the figures Martin Gahbauer, Nationwide’s Senior Economist, said: “UK house prices were barely changed in January, recording a modest fall of 0.1% over the month on a seasonally adjusted basis. Although house prices have now fallen for three consecutive months, the price of a typical property is still 4.2% higher than a year ago. However, this figure is down from 4.8% in December and represents the lowest rate of annual house price inflation since December 2005.

Highlighting the softness in house prices since November, the 3-month on 3-month rate of price growth fell to -0.3%, down from +0.9% the previous month. The average price of a typical property stood at £180,473 in January, an increase of £7,249 over the last 12 months.”