British house prices suffered a monthly fall for the first time in three years in October, leaving them up by the smallest yearly amount since January, the Nation-wide building society said on Thursday.
The figures, which are adjusted to account for seasonal changes in the property market, are likely to be taken as one of the clearest signals yet that the British housing boom which has gone on since the late 1990s is over.
The cooling in the property market follows five Bank of England interest rate hikes since last November and analysts said the report was likely to make policymakers think twice before raising rates further above 4.75 percent.
House prices fell 0.4 percent in October compared with the month before, the first drop since the month after the September 11, 2001 attacks on the United States and the biggest monthly fall since February 2001, Nation-wide said.
That left the annual rate of increase at 15.3 percent, markedly lower than the 17.8 percent recorded in September and was the weakest since 14.3 percent in January. House prices were flat over the past three month period.
Most analysts are now convinced the BoE will leave rates steady for the remainder of the year and some have even been speculating about possible interest rate cuts next year, particularly if the housing market cools even more rapidly.
"Given the Bank of England's concern that the housing market slowdown could turn into an 'abrupt' correction, it seems ever more likely that the BoE will leave interest rates unchanged for an extended period," said Howard Archer, economist at Global Insight.
The decline in prices in October brought the average asking price of a British home down to 152,159 pounds from 153,727 reported in September and a peak of 154,299 in July.
Comments
Comments are closed.