The latest Nationwide house price index reveals that the average house price in the UK now stands at £158,442, a 0.4% decrease from October.

The year-on-year decrease from November 2007 is 13.9%, down from 14.6% last month.

Fionnuala Earley, Nationwide’s chief economist, said: “In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market. The labour market is weakening, which will inevitably hinder market demand, particularly when property remains expensive relative to earnings.

“With prices falling at their current rate there is also little incentive for new borrowers to hurry into the market. However, there are a number of measures which should provide some support to the market in general and help existing and potential homeowners in these difficult times.

“The Monetary Policy Committee’s decision to reduce interest rates by 1.5% at the November meeting took most commentators by surprise. It was a bold step and has left no doubt that the focus of their concerns has shifted from inflation to deflation.

“While not aimed directly at the housing market, such a substantial shift in the Bank Base Rate will help a significant number of existing and potential homebuyers. Different borrowers will be affected in different ways by rate cuts. The estimated one-third of borrowers on tracker mortgages will have benefitted one-for-one from Bank Base Rate cuts.”

This entry was posted on Friday, November 28th, 2008 at 9:16 pm and is filed under Housing Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.