Fall in house prices starts to slow

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Nationwide Building Society said house prices dropped by just 0.4% during the month, a considerable improvement on October's 1.3% slide.

The annual rate of price falls also eased to 13.9%, compared with a year-on-year drop of 14.6% a month earlier.

It is the first improvement in annual house price inflation since October last year, when the year-on-year growth rate first began to decline.

The figures provided some rare good news for homeowners, who have now seen an average of £25,000 wiped off the value of their home since prices first began to fall, leaving the average property in the UK costing £158,442.

The data also helped lift share prices for beleaguered housebuilders, who have been hit hard by the current downturn.

But economists were less upbeat, with most warning that too much should not be read into one month's figures.

Howard Archer, chief UK and European Economist at IHS Global Insight, said: "We doubt very much that the markedly reduced monthly drop in house prices in November marks the start of an improving trend for house prices as the fundamentals remain largely unfavourable."

He added that ongoing tight credit conditions, combined with rising unemployment and the recession, would continue to weigh down on the housing market.

Figures released earlier this week by the British Bankers' Association showed that the number of new mortgages approved for house purchase during October remained close to record lows. But November's surprise 1.5% interest rate cut is likely to provide some boost to the market.