The recent trend of modestly falling house prices continued during November, with the price of a typical UK property declining by 0.3 per cent on a seasonally adjusted basis between October and November, says Nationwide.
The three month-on- three month rate of change – which Nationwide says is a smoother measure of the recent price trend - rose from minus 1.5 per cent to minus 1.3 per cent.
This, says Nationwide, remains well above the deeply negative rates of minus 5 per cent to minus 6 per cent that prevailed during the most severe phase of the downturn in 2008.
The annual rate of change - which compares house prices to their level 12 months ago - fell from 1.4 per cent to 0.4 per cent and suggests that house prices are essentially unchanged from a year earlier.
Although property prices are declining, rents are rising. Falling supply of new property to the rental market coupled with increased demand led to a rise in rents in the three months to the end of October, says the latest RICS Residential Lettings Survey.
As a result, surveyors report the rental market remains buoyant, with properties being let very quickly and landlords experiencing very few voids. Demand for rented property continues to be very strong, with houses being slightly more popular than flats. 33 per cent more surveyors reported a rise in demand than a fall, the fastest increase in demand since 2008.
"There is little evidence to suggest that house price declines are likely to accelerate in the months ahead,” said Martin Gahbauer, Nationwide's Chief Economist.
“Much of the weakness in property values since the Spring has been driven by a return of sellers to the market, following unusually low levels of property for sale in 2009 and early 2010.
“However, there is little to indicate that these sellers need to achieve a sale urgently for financial or economic reasons, which means that the downward pressure on house prices is only modest.
“In addition, there are early signs that the flow of new property onto the market may be slowing down again as potential sellers observe the recent weakness in prices and decide against marketing their properties at the current juncture.
“Similar seller behaviour was observed in late 2008 and early 2009, eventually leading to a decline in the amount of property on the market.”
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