House prices have continued to fall across the UK for the 11th consecutive month, according to figures from Nationwide.
Prices fell 1.7% during September and are now 12.4% lower than a year ago, at an average of £161,797.
A regional analysis shows prices fell across all of the UK’s regions, with the South of England hit harder than the North.
Falls have remained consistent for many months and Nationwide says the pace of the housing crash seems to have stabilised after seeing rapid acceleration in the early part of 2008.
Commenting on the rapid turnaround in housing market fortunes, Fionnuala Earley, chief economist at Nationwide, says: “Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets.
“In September 2007 the credit crunch had just begun, house prices were rising at an annual rate of 9%, the number of house purchase approvals per month was averaging at around its long term trend, almost 40% of first-time buyers were borrowing over 90% and the Bank Rate was at 5.75%, but with many expecting it to increase to 6%.
“The situation in September 2008 could hardly be more different. House prices are falling, activity has contracted sharply, fewer than 20% of first-time buyers are borrowing above 90%, and the Bank Rate has fallen to 5% and is expected to fall to 3.5% by the end of 2009.”
A regional analysis of house prices shows East Anglia and the South West are the worst affected regions in England, with each registering an 11.4% fall on a three-monthly smoothed basis.
Northern Ireland is the worst affected overall, with prices falling 29.8% in twelve months, but Nationwide says this is unsurprising given the huge boom the region saw over the past few years.
The North West and West Midlands saw prices fall 9.1% on average, the least affected regions in England, while Scotland saw prices fall just 7.1%.
Earley says it is difficult to predict the future of the housing market given present conditions, as factors such as a larger buy-to-let market and historically low interest rates make it difficult to forecast how other aspects of the economic downturn might affect house prices.
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