Business | Property
UK house prices post first annual decline in 12 years
British house prices fell for the sixth straight month in April to record their first annual decline in more than 12 years, just as the consumer mood soured to its bleakest since the slump of 1992.
- Reuters
- Published: 00:45 May 1, 2008
London: British house prices fell for the sixth straight month in April to record their first annual decline in more than 12 years, just as the consumer mood soured to its bleakest since the slump of 1992.
Evidence from two surveys yesterday came just after a Bank of England policymaker warned there was now a danger of house prices crashing by more than 30 per cent and that the British economy faced a real threat of recession.
The economic data paints a grim backdrop for Prime Minister Gordon Brown on the eve of local government elections in which his Labour Party is expected to fare badly against resurgent opposition Conservatives, who are consistently leading national opinion polls.
Nationwide building society said house prices fell 1.1 per cent last month to £178,555, after a downwardly revised 0.7 per cent fall in March - more than twice the rate of decline forecast by analysts. Prices were 1.0 per cent lower than a year ago.
"Rapidly deteriorating sentiment over the housing market also heightens the risk that house prices could fall more sharply over the next couple of years," said Howard Archer, economist at Global Insight.
"Consequently, it is very possible that a drop of more than 20 per cent in house prices could occur over the next couple of years."
Britons, about two-thirds of whom are home owners, are particularly sensitive to house price moves and Prime Minister Brown was quick to get on the airwaves after the Nationwide report with a promise that he would make tackling falling prices a priority.
"My aim and my priority is that we can lead the people in Britain through this economic problem and do so by taking the right decisions to get liquidity to the banks, to make sure that the housing market starts moving again," he told BBC Radio.
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