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House price inflation falls in February

Tuesday 4th March 2008

House price inflation across the UK fell to an average of 2.7 per cent in February, according to one industry monitor.

The Nationwide House Price Index indicates that the monthly change in prices changed from -0.3 per cent in January to -0.5 per cent in February, in news likely to interest those with mortgages, as well as buy to let investors and first time buyers.

A half a per cent fall in average values, the February record marks the fourth consecutive month of decline and brings price inflation to low levels not seen since November 2005.

Commenting on the data, Nationwides chief economist Fionnuala Earley said: "The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year."

In news likely to be welcomed by mortgage holders throughout the country, Ms Earley asserted that in Nationwides opinion the chance of recession in the UK was "remote".

The commentator added that given years of unprecedented growth, it should not come as a surprise that the economy was beginning to enter a slower phase.

Meanwhile, earlier this week Standard Life warned those with mortgages against too much reliance on the capital invested in their homes.

It stated that based on current market performance, downsizing was likely to provide retirees with an average surplus of £150,000 - an income valued at in the region of £130 per week.

Those moving from a bungalow to a flat, meanwhile, would on average release enough capital for just £22 per week in income.
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