House prices slide 1.9 per cent in August

The price of a typical British home has gone down by 1.9 per cent so far this month, Nationwide’s regular index shows.

An average house now costs £164,654 compared to £169,316 in July, with the latest total a fall of 10.5 per cent on August 2007.

Further figures from the building society show more borrowers are going for fixed rate mortgages to protect their payments during the uncertain economic climate.

The annual price fall is now in double digits for the first time since the end of 1990.

Nationwide chief economist Fionnuala Earley said:

“Recent activity levels in the housing market have been very subdued. House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year.”

The figures were released a day after it was revealed housebuilding giant Taylor Wimpey had slumped to a £1.5 billion loss in the first half of 2008.

Ms Earley added house builders were saying a lack of confidence in the housing market appeared to be the biggest reason behind the slide in demand, with a tightening on lending also an issue.

She said:

“Estate agents’ data across all property types is a little more optimistic and suggests that there may be some glimmers of interest returning to the market.”

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