House Prices Fall Again In November

 

Nationwide have reported that house prices fell by 0.3% in November, bringing the average price down to £163,398.

This new decline means that gains made in the earlier part of this year have effectively been wiped out, with prices now standing at just 0.4% higher than this time a year ago.

Nationwide's chief economist, Martin Gahbauer, said the rate of falling house prices should now slow:

“There is little evidence to suggest that house price declines are likely to accelerate in the months ahead," he said.

"Much of the weakness in property values since the spring has been driven by a return of sellers to the market, following unusually low levels of property for sale in 2009 and early 2010. However, there is little to indicate that these sellers need to achieve a sale urgently for financial or economic reasons, which means that the downward pressure on house prices is only modest. In addition, there are early signs that the flow of new property onto the market may be slowing down again as potential sellers observe the recent weakness in prices and decide against marketing their properties at the current juncture. Similar seller behaviour was observed in late 2008 and early 2009, eventually leading to a decline in the amount of property on the market."

However, Mr Gahbauer remarked that the real weakness in the housing market isn't so much about prices as buying activity itself. He commented that in the current downturn, house purchase approvals have declined to an all-time record low and are around 50% below the long-term average.

 

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