House prices fell by 1.0% last month according to Nationwide, ending a strong run of nine consecutive increases on the index and putting the average price of a UK property at £161,320. The three-month-on-three-month rate looks more positive, at 1.6%, down from 2% in January while the annual rate also increases, as this February’s fall is still less than the fall in February 2009.
This latest report from Nationwide says the market lost momentum in February as the stamp duty holiday came to an end and house hunters were obstructed by the weather. New buyers enquiries dropped sharply in the New Year, as did the number of new mortgages taken out.
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‘Even without the impact of stamp duty changes and the snowy weather, it would have been surprising to see house prices maintain the very strong upward momentum seen for most of 2009,’ said Martin Gahbauer, Nationwide 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. 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 over the course of 2009.’
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