House prices have suffered their biggest annual fall since the property slump of the early 1990s, a leading index revealed yesterday, in news that sent shares in some of Britain’s largest home lenders and builders tumbling.
Year on year, house prices are now 4.4% below their levels of May 2007, according to the Nationwide house price index. On an annual basis, that is the biggest fall since December 1992, when the UK was in the throes of a severe housing downturn.
In May alone the index recorded a 2.5% drop, its biggest one-month fall, wiping £5,000 off the average British home. The three-month moving average, which smoothes out single month volatility, also slid sharply. In the three months to the end of May house prices fell 2.9% compared with the three months to the end of April.
Fionnuala Early, Nationwide’s chief economist, said the streak of falling prices had lasted seven months, the longest consecutive period of declines since 1992.