House prices fall 6.2% in year

HOUSE PRICES fell by 1.4 per cent last month according to the latest index from the Nationwide Building Society. The fall - the largest in the past 12 months - brings the annual decline in prices to 6.2 per cent.

September's figures were affected by several factors. The stamp duty holiday ended in August and buyers tried to bring forward their purchases to beat the deadline. Then the turmoil in the currency markets and the lurch up to 15 per cent interest rates undermined confidence in financial stability.

John Hutchinson, corporate strategy director of the Nationwide, Britain's second largest building society, said the September figure was not likely to be a good guide to longer-term trends in house prices. 'Although it is always difficult to identify turning points in the housing market, we believe we must be close to such a point now, particularly after the recent lowering of mortgage rates.'

The average home now costs pounds 54,529, a drop of pounds 799 in one month, and almost pounds 3,600 less than the same time last year.

Gary Marsh, housing economist at the Halifax Building Society, said its own index would show similar price falls in September. The volume of house sales during the month was very low. Most sales would be 'forced sales' due to repossession, divorce or a job move. 'All voluntary sales would have gone through before 19 August,' he said.