UK house prices saw their second consecutive monthly fall in August, according to Nationwide.
The lender recorded a 0.9% decline in the average value of a home, following a 0.5% month-on-month fall in July.
The annual rate of inflation remained in positive territory at 3.9% but was down sharply, from 6.6% in July and 8.7% in June, and the three-month rate of change shows prices stagnating over the summer months, meaning this measure is likely to turn negative in September.
Nationwide’s chief economist, Martin Gahbauer, points out that it is the first time since February 2009 that house prices have fallen in two consecutive months.
However, he comments: “Recent market trends remain consistent with an unwinding of the supply-demand imbalance that drove up prices for much of the last year.”
The economist adds: “There is little evidence of distressed selling … as such, the current period of price declines is likely to remain relatively modest.”
According to Mr Gahbauer, house price increases were ahead of the recovery in the wider economy in 2009 and the current correction should not be regarded as an unhealthy development.
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