November house prices down 0.8%

November house prices fell at their fastest rate for more than 12 years, new figures from Nationwide Building Society have shown.

The mortgage-lender said the average cost of a home in the UK dropped by 0.8 per cent during the month, almost wiping out October's unexpected jump of 1.1 per cent.

It is the first time the group has recorded a fall in house prices since February last year and it is the biggest monthly drop since June 1995.

But the group stressed that monthly figures could be volatile, and added that November's drop was partly a reflection of the strong gain seen during October.

The fall helped reduce annual house price inflation to 6.9 per cent, down from 9.7 per cent the previous month, restoring the trend of slowing growth seen during the second half of this year.

The average home in the UK is now worth £184,099, nearly £12,000 more than in November last year.

Meanwhile, figures from the Bank of England showed the number of mortgages approved for people buying a home fell to their lowest level for nearly three years during October.

Just 88,000 home loans were approved for people moving during the month, the most subdued figure since February 2005 and well down on the recent monthly average of 109,000.

Fionnuala Earley, Nationwide's chief economist, said: "November's data confirms that the housing market is indeed cooling in line with the weakening in housing market drivers.

"Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market."

Earlier this week property information group Hometrack said house prices in England and Wales fell for the second month in a row during November, dropping by 0.2 per cent.

And Britain's biggest mortgage lender, Halifax, said house prices fell by 0.5 per cent in October, while property website Rightmove said they dropped by 0.7 per cent in the four weeks to November 10.

At the same time the Royal Institution of Chartered Surveyors said house prices fell at their fastest rate for more than two years during October as would-be buyers continued to stay away from the market.

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