House price slump hit 16% in 2008

According to the building society's latest index, December saw a 2.5% fall meaning the annual slump hit 15.9%. Last month's decline is considerably more pronounced than the more modest slide of 0.4% in November. As a result, the average house price has fallen to £153,048. Fionnuala Earley, chief economist at the mutual, warns conditions remain highly volatile going into 2009, making it more difficult than usual to produce a meaningful forecast for the year ahead. "While house price falls are helping to improve affordability and the steep drop in interest rates will provide some furthe...