House prices fall

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

The typical house price is £162,228, following the second monthly drop in a row after a 0.2% fall was also recorded in December, Nationwide's latest house price index said.

But the lack of new homes coming to market means prices are likely to drop only modestly or move sideways in the near future, the building society said.

Buyers are being offered some of the cheapest ever mortgage deals, with initial mortgage payments running at their most affordable level since 2003.

But Nationwide said the weakness in demand from buyers was partly due to the hurdle many face in finding a deposit.

Household budgets have been under intense pressure due to high living costs and deteriorating employment conditions.

Borrowers are also expected to have a tougher time raising a mortgage this year as lenders tighten their criteria amid the weak economic backdrop.

Robert Gardner, Nationwide's chief economist, said: "Given the challenging conditions prevailing in late 2011, with the UK economy contracting in the final three months of the year, it's not surprising that house price growth softened at the start of 2012."

He continued: "The demand/supply balance may move further in favour of buyers in the months ahead. The economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve.

"Nevertheless, with the flow of properties coming on to the market still more of a trickle than a flood, house prices are likely to continue to move sideways or only modestly lower in the months ahead."

Mr Gardner said record low deals offered by lenders as the Bank of England keeps the base rate at a historic low have improved affordability to some extent.

He said: "Since 2007, initial mortgage payments as a percentage of take-home pay have fallen from 46% to 31% for a first-time buyer borrowing with a 20% deposit.

"Compared to take-home pay, initial mortgage payments are now at their lowest level since 2003, just above the long-run average of 29%."