Property prices fall 0.9% in August

Thursday, 02 September 2010 12:00

Property values fell by 0.9 per cent during August, marking a second consecutive decline in prices.

Figures from Nationwide put the average UK home cost £166,507 last month.

The mortgage lender's chief economist Martin Gahbauer said annual price inflation fell "quite sharply" in August to 3.9 per cent.

It had stood at 6.6 per cent in July and 8.7 per cent in June.

Elsewhere, quarter-on-quarter growth in property values, which is seen as a good indicator for medium-term market trends, slowed to zero last month.

"Unless house prices bounce back strongly in September, the three-month rate of change will turn negative next month," Mr Gahbauer said.

He added that the recent surge in the number of properties for sale has weakened property values because prospective buyers can now choose from a wider range of houses, which gives them greater bargaining power to drive down asking prices.

Nationwide's figures come after statistics from the Bank of England showed lenders approved 340,000 mortgages for home purchase between January and July.

The Royal Institution of Chartered Surveyors said this figure was "well down on historic norms".

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