UK house prices fell between July and August, according to new figures published by Nationwide.
The latest House Price Index from Nationwide shows that the average price of a home fell by 0.1% to £210,495. The latest dip in prices comes after property values rose by 0.2% between June and July, but fell for three months between March and May.
The consecutive falls in prices over the spring marked the first time this had happened since the financial crisis.
The latest monthly drop brings the annual rate of house price growth back down to 2.1%, the level it was at in May, and the lowest rate for four years.
Nationwide’s chief economist, Robert Gardner, warned that the drop was ‘consistent with signs of cooling in the housing market and the wider economy’.
He said; “It may be that mounting pressure on household finances is exerting a drag. Wages have been failing to keep up with the cost of living in recent months and consumer sentiment has weakened. While measures of housing affordability are not particularly stretched at a UK level, pressures are evident in some regions, especially London and the South of England.”
In the longer term, Mr Gardner said house prices would depend on how the wider UK economy performs.
“Ultimately, housing market developments will depend on wider economic performance. The UK economy slowed noticeably in the first half of the year, and there has been little to suggest a significant rebound in the months ahead. While employment growth has remained robust, household budgets are under pressure. This suggests that housing market activity will remain subdued.
“Nevertheless, constrained supply is likely to continue to provide support for house prices. The stock of homes on estate agents’ books remains close to 30-year lows and the number of new homes coming onto the market remains subdued.”
Weakening house prices will be worrying for homeowners whose properties are in negative equity, or who are in danger of falling into negative equity should house prices continue to fall.
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