Nationwide Tracks Further House Price Fall

House prices dropped by a further 1.7 percent this month, mortgage lender Nationwide has claimed.

The latest survey from the firm, released today, suggests that the average property value in the UK now stands at 8.1 percent below its level a year ago. According to the data, the typical home now costs £169,000, a £15,000 drop over last year.

As well as marking the biggest single annual price drop since Nationwide began its survey 17 years ago, the new figures also show that house prices have been dropping for the past nine months in a row. The onset of the credit crunch, which began last summer, has been blamed for the general decline in the property market.

This is because many mortgage lenders have become much more risk-averse due to the financial crisis - and have been restricting credit to borrowers, raising rates and even taking cheaper deals of the market entirely as a result.

Chief economist at Nationwide Fionnuala Earley commented: "Overall the weakening economy and poor housing market sentiment do not suggest that the market will recover quickly."

The expert suggested, however, that with many mortgage firms beginning to impose rate cuts - HSBC, Halifax and Nationwide itself having done so in recent weeks - the housing decline could be checked.

"As the cost of mortgages begins to come down, activity could be bolstered and restore some liquidity to the housing market," Ms Earley added. "However this is not expected to happen overnight."