Print friendly version 31 Jan 2008

House prices decline for third consecutive month

House prices dipped for the third consecutive month running in January 2008, falling by 0.1%, according to figures from Nationwide.

Annual house price inflation also fell in the same month, from 4.8% in December 2007 to 4.2% this month. January 2007 recorded a significantly higher annual increase of 9.3%. The bank has said that housing market conditions have continued to slacken due to falls in mortgage approvals and demand for property.

Commenting on the figures Martin Gahbauer, senior economist at Nationwide, said: “Although house prices have now fallen for three consecutive months, the price of a typical property is still 4.2% higher than a year ago. However, this figure is down from 4.8% in December and represents the lowest rate of annual house price inflation since December 2005.”

Nationwide has however, expressed confidence regarding the resilience of buy to let, as the fundamentals of the market may not be as weak as people think. “A property investor planning to hold the investment over a long period will benefit from future rental growth and is in a better position to ride out temporary periods of weak capital gains,” Gahbauer continued.

He added: “As the year progresses, a key factor to watch in the housing market will be how much pent-up demand returns to explore the market, and how much of this is translated into actual housing transactions.” 

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