House prices have fallen for a second month in a row - the first consecutive drop since February 2009.
The housing market continues to show signs of slowing according to Nationwide. Property prices went down by 0.9% during August, following a slide of 0.5% in July. The annual rate of change also eased for the fourth consecutive month to stand at 3.9%, the lowest year-on-year rise since November 2009.
These figures come just days after economists warned that the housing market could be heading for a double dip. Figures from the Bank of England showed that only 48,722 mortgages were approved for buyers purchasing in July - a level that economists say is consistent with house price falls.‘Buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices’ says Nationwide's chief economist Martin Gahbauer Nationwide said the quarter-on-quarter growth rate, generally seen as a smoother indicator of market trends, had fallen to 0% during the three months to the end of August. This suggested house prices had stagnated during the summer, the building society continued.It warned that, unless house prices bounced back strongly in September, the quarterly growth rate was likely to turn negative next month. Nationwide's chief economist Martin Gahbauer said: "Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of the last year."As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices. "But he added that there was little evidence of distressed selling, with the number of homes that were repossessed falling during the second quarter.He said: "Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development."But the latest report of house price falls is likely to do little to improve confidence among potential buyers. Many have adopted a wait-and-see approach due to concerns about the state of the economy, job security and the impact of future tax rises.
The average home currently costs £169,347, according to Nationwide.
