House Price See Massive Fall In May

Housing Market

30/05/2008

The price of homes fell more in May that in any month since 1991, according to one of the UK's biggest lenders.

The Nationwide building society said prices fell by 2.5% over the month.

It said prices are now 4.4% lower than a year ago, a drop of £8,000, which has taken the average UK house price down to £173,583.

The UK's second-largest lender announced that price falls are now accelerating and have continued for seven months in a row.

Fionnuala Earley, the Nationwide's chief economist, said: "The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market.

"At seven months, this is also the longest consecutive period of monthly falls since 1992."

The Nationwide said its survey matches other recent evidence about the state of the UK housing market.

It followed news that new mortgage approvals for home buyers in March were at their lowest since the Bank of England's records on the topic began back in 1993.

But it said a much smaller proportion of borrowers face the full effect of falls in prices than was the case in the 1990s.

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