Annual house price inflation has fallen to just 2.7% in February, the lowest for over two years and an indication of the considerable slowdown in the market, according to Nationwide.
The building society’s latest house price index shows average house prices fell for the fourth consecutive month, losing 0.5% in February.
The price of the average UK home has fallen to £179,358, bringing the annual rate of house price inflation to its lowest level since November 2005.
Annual growth fell to 2.7%, after a monthly fall of 0.5%, compared with 4.2% in January, following a drop in prices of 0.3% last month.
Fionnuala Earley, chief economist at Nationwide, comments: “The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year.”
Three-month on three-month comparisons show price growth fell to -1% in February, down from -0.4% the previous month.
Earley says growth rates of the past two years are unlikely to be seen again for some time. However, she adds that if the Bank of England’s predictions of slowing growth, rather than recession, are correct, the outlook for the housing market will not be as gloomy as some have speculated.
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