Nationwide Building Society reported a fall of 0.7% in British house prices in October, furthering the double dip in the UK housing market. According to the figures released this morning, the smoother three-month average decline accelerated to 1.5%, leaving little doubt that the UK housing market is in the midst of a double dip. The Nationwide analysis pointed to quantitative easing as a way to boost the housing market. Nationwide chief economist Martin Gahbauer writes:
October saw a continuation of the modest downward trend in house prices that began at the start of the summer. The average price of a typical UK property edged down by a seasonally adjusted 0.7% month-on-month in October. The three month on three month rate of change – a smoother indicator of the recent price trend – fell to -1.5% in October from -1.0 % in September. This is the largest decline over three months since April 2009, but is still well below the 5-6% rates of decline on the three month measure seen during the second half of 2008. The annual rate of change – which compares the current level of house prices against their level twelve months ago – declined from +3.1% in September to +1.4% in October. If the recent trend in house prices were to continue through November and December, the annual rate of house price inflation would drop to between 0% and -1% by the end of 2010. This would compare to a rate of +5.9% at the end of 2009.