House prices fell by 0/8% in November, says Nationwide, bringing down the annual rate of increase to 6.9%, as sentiment in the market weakened slightly further, although underlying factors remain strong.
The price of a typical house in the UK is now 184,099, almost 12,000 more than at this time last year.
This result is the first price fall Nationwide has recorded since February 2006, but the mortgage lender was keen to point out that monthly data can be volatile, and the results for November make rather more sense when taking into account October?s strong results, and the extremely strong results recorded at this time last year.
‘There is a plethora of housing market indicators and looking at the headline figures alone can sometimes be confusing,? said Fionnuala Earley, chief economist at the Nationwide. ?With sentiment so important to the housing market, an oversimplification of the headline data can have real effects. This highlights the importance of looking at the overall trends, rather than focusing on one month?s data in isolation and more importantly, examining the underlying fundamentals.?
Ms Earley said she expected things to remain quite robust going into 2008: ?We already expect economic conditions to be more difficult for the housing market next year, but we do not expect a recession. Furthermore, with interest rates on the way down and the continued issue of undersupply of housing in the UK market, the underlying fundamentals are perhaps more positive than the recent swings in sentiment might suggest,? she added.