Nationwide’s latest figures reveal some surprising results about house prices…

In its latest house price index, Nationwide said that prices had fallen by 0.6% in March, taking the average UK house price down to £179,110. This meant the annual rate of increase fell to just 1.1% - the lowest rate of growth for 12 years.

Nationwide chief economist Fionnuala Earley  commented: “The price of a typical house in the UK is now £179,110, only £2,027 more than this time last year. However, prices are still 11% higher than two years ago and 47% higher than five years ago - the equivalent of a price rise of more than £30 per day for the last five years."

Nationwide argues that there had been ‘a clear change in sentiment’ since the late summer, which had led to a ‘sharp slowing in house price growth”

Rate cut imminent?

Ms Earley added: "Expectations of higher house prices will have undoubtedly encouraged some speculative demand in the housing market over the years.  But with lower house price growth expected now and in the future, the effect will work the other way, causing at least some of this demand to fall away.

"The collapse of Bear Stearns and the fallout from false rumours of problems in a major UK bank may have helped to shift the focus of the monetary policy committee (MPC) to the need to loosen conditions in the financial markets," she said.

"We think these latest developments, along with the continued weakening in the housing market, will mean that the MPC will bring forward its rate cut to April”