Nationwide reports 12% annual fall overall but points to signs that decline may be slowing

House prices fell by 1.7% during September, the 11th monthly fall in a row, according to the latest data from the Nationwide.

The building society's figures show that prices are now 12.4% lower than a year ago, leaving the average UK home priced just 拢161,797.

It said market weakness was 鈥渘ot surprising given ongoing turmoil鈥� and that prices would continue to fall in the short term as the credit crunch continues to squeeze mortgage lending.

However, Nationwide pointed to signs that the house price decline is no longer accelerating and said that longer-term prospects for the housing market 鈥渁re more sound鈥�.

Fionnuala Earley, Nationwide's chief economist, said: 鈥淗ouse prices have now fallen for eleven consecutive months, but the monthly rate of fall has been almost unchanged in the last three months.

鈥淭he less volatile three-month-on-three month series has also barely changed for the last three months, after accelerating in the first half of the year. This may suggest the beginning of some stabilisation in the pace of house price falls.鈥�

She added: 鈥淭he long-run trend growth in real house prices in the UK is around 2.7% per annum and there is no reason to expect that over the longer term house prices should

not continue to go up in real terms, even if we are going through a sharp correction now.鈥�

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