Fall in Feb Prices
26 February 2010
LONDON (Reuters) - House prices showed a surprise 1.0 percent fall in February, ending a run of nine consecutive monthly increases, figures from the Nationwide Building Society showed on Friday.
Analysts had forecast an increase of 0.4 percent for the month and Nationwide said it was too early to say if the figures were the start of a new trend or a temporary blip.
'In light of low growth in household incomes and elevated levels of unemployment, house prices were beginning to move ahead of the recovery in general economic conditions,' said Martin Gahbauer, Nationwide's Chief Economist.
'With the longer term stability of the market in mind, it would be a positive development for house prices not to become decoupled from the economic fundamentals,' he added.
'A pause in the upward trend will also be a relief to potential first-time buyers who are no longer benefiting from the stamp duty holiday and for whom affordability had begun to deteriorate again over the course of 2009.'
The annual rate of inflation increased to 9.2 percent from 8.6 percent because the price decline in February was smaller than the 1.5 percent fall 12 months ago.
The British economy crawled out of recession in the last quarter of 2009, according to provisional data. A second estimate of the quarterly GDP figures is due at 9:30 a.m. on Friday.
The country's housing market had recovered quite swiftly from sharp falls seen in 2008 and early 2009, helped by record low official interest rates and a shortage of properties coming on to the market.
Nationwide said the average price of a property sold in February was 161,320 pounds.
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