Nationwide records biggest monthly fall in UK house prices on 100 Mortgages

Nationwide have released some shocking figures which show that UK house prices have slid to 2.5% in the month of may, this is the biggest monthly drop that the Building society have ever recorded. This huge drop came as a surprise too many economists, as they were expected a drop of only 0.5%. The average house lost almost £5000 in value in the month of May, which means that the average house price is now 4.4% lower than this time last year.

Sky News reports that this is now the biggest decline in house prices since December 1992, when we saw massive drops of 6.3%. The 2.5% drop in UK house prices is now the seventh successive month that these prices have fallen, let us hope that it will not match 16 months, which is the longest run of UK house price falls.

The fall in house prices have just fueled the latest fears of economy growth, as we have seen a huge increase in food, fuel and energy prices. It does look as though the Bank of England will have to cut interest rates after this latest house price fall, as it is a huge risk to the economy. Although these figures do not look great, Nationwide have said that house prices are still 5% higher than 2-years ago, and 10% higher than in May 2005.

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