House prices fall 3 months in a row for the first time since credit crisis

HOUSE prices have endured their most sustained fall since the financial crisis began, according to Britain’s biggest building society. Nationwide yesterday warned of a ‘slowdown’ in the market as it revealed that property values have dipped for three months in a row – the first time this has happened since 2009.

It said values slid by 0.2 per cent in May, following a 0.4 per cent decrease in April and 0.3

‘The market is losing momentum’

per cent in March.

However, average house prices are still above their rate at this time last year – by just over £4,000. The UK average was £208,711 last month, marking a 2.1 per cent increase from £204,368 in May last year. This is the slowest pace in almost four years and will be a shock to many homeowners accustomed to seeing the value of their property soar each year.

Nationwide predicted that house prices will grow just 2 per cent this year.

The building society’s closely watched house price index is the latest in a string of reports that show the property market is beginning to struggle. But it has still confounded gloomy predictions from Remain campaigners – led by former chancellor George Osborne – that it would collapse after the referendum. In a thinly veiled swipe at Mr Osborne, Nationwide said although house prices slowed after the vote last June, this was a ‘continuation of a trend’ driven by the 3 per cent stamp duty surcharge on second homes and buy-to-let properties he had introduced in April.

This has caused a large slide in prices in some parts of the country, including expensive homes in wealthy areas of London.

Robert Gardner, Nationwide’s chief economist, said: ‘It is still early days, but this provides further evidence that the housing market is losing momentum. Moreover, this may be indicative of a wider slowdown in the household sector.’

Describing an ‘ unusually uncertain’ outlook for the economy, he said house prices will slow in the months ahead along with the wider economy as ‘rising inflation increases the squeeze on household budgets’.

Some experts yesterday said the slowdown will be welcomed by first-time buyers who have struggled to get on the housing ladder as prices have surged.

Industry figures published last week showed first-time buyers are outnumbering home movers for the first time in more than 20 years. Richard Sexton, director at property surveyors e.surv, said: ‘A decrease in house prices will be welcomed by many looking to take their first step on to the property ladder.

‘First-time buyers are the lifeblood of the property market, and their presence allows others to move up the ladder and keep the whole market moving.’