House prices down 0.7% in July
Compared to a year ago, the decline in prices has reached a 2.6% year-on-year making this the weakest market since August 2009. The price of the typical home was £164,389.
Nationwide believes the additional economic measures already announced by the Bank of England and HM Treasury, “should also provide much needed support for the economy and the housing market in the months ahead.”
Commenting on the figures, Robert Gardner, chief economist at Nationwide, said: “The weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy.
“Data released last week revealed that the UK recession intensified in the three months to July, with the economy contracting by 0.7% quarter on quarter.
“This disappointing outturn can be only partly explained by unusually wet weather and the impact of an extra bank holiday during the quarter. Indeed, the UK economy has contracted by 1.4% over the past nine months, and is now 4.5 percentage points smaller than it was in Q1 2008.
“Against this difficult economic backdrop, it could be argued that UK house prices have shown resilience. While prices are currently 13% below their 2007 peak, this is less than the declines seen in a number of other economies that have experienced similar or more robust economic recoveries.”