House Prices Plunge 12.4% in a Year

House prices fell by 1.7 percent last month, according to building society Nationwide.

The decline – the 11th in a row on the firm’s monthly index – now means that the value of the average property has now fallen by 12.4 percent in a year. The typical home now costs £161,797.

Regionally, falls in prices were found to be sharper in the south of England than in the north. Commenting on the survey, Nationwide’s chief economist suggested that hope remained for a price recovery in the future.

Terming the current price trend a “correction” in the market, Fionnuala Earley commented: “Casting back one year, there have been some astonishing and unpredictable developments in the housing and financial markets.

“We would need to see a significant shift in consumers’ sentiment before we begin to see any real recovery in activity and subsequently house prices.”

Nationwide’s survey follows stark figures for mortgage lending in August from the Bank of England, which found that the amount of money borrowed had collapsed by 95 percent in a month. The lending figure was also 97 percent down on August 2007, when the credit crunch was just beginning.

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