Nationwide's August House Price Index
House prices decline by 0.6% in August
- House prices declined by 0.6% in August
- Price of a typical home in August was 0.4% lower than one year ago
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: "UK house prices declined by 0.6% in August, although this doesn't change the picture of relative stability that has characterised the market over the past twelve months. Indeed, prices were broadly unchanged compared with August 2010 - just 0.4% lower.
"Sluggish demand for homes, combined with only a gradual rise in the supply of available properties, has helped to keep property prices stable since last summer. We expect this trend to be maintained over the remainder of 2011, although downside risks have increased as UK and global growth prospects have weakened.
Challenging economic outlook
"The UK economy grew by just 0.2% in the second quarter of the year – well below its long-term trend rate of around 0.7%. Indeed, despite being more than eighteen months into the recovery, UK activity is still around 4% below where it was at the end of 2007.
"The Office for National Statistics suggests that at least some of the weakness in Q2 was the result of a number of one-off factors – including the Japanese earthquake (which disrupted manufacturing supply chains) and an extra bank holiday with the Royal Wedding. However, more recent data provide little evidence of a rebound, with surveys of business activity in the manufacturing and service sectors still implying only modest growth in the months ahead.
"Moreover, signs that the US recovery may be running out of steam and ongoing problems in the Eurozone are a particular concern for UK growth prospects at present.
"The major risk for the housing market is that weak economic growth could lead to a further deterioration in the labour market."
Read the full House Price Index.