December fall of 0.5% sees annual house price inflation dip below 5% according to Nationwide survey

House prices fell for the second month in a row in December according to new figures released by the Nationwide today.

Prices fell by 0.5% in December pegging back annual house price inflation to 4.8% compared to 6.9% in November and 10.5% in December 2006.

Last month house prices fell by 0.8%. Growth over the last three months fell to 0.9%, the lowest since November 2005.

Fiunnuala Earley, Nationwide’s chief economist, said: “The housing market has weakened significantly in the closing months of 2007 after holding up more strongly than expected in the earlier part of the year.”

Nationwide said that the falls were caused by the lack of affordable housing, past increases in interest rates and the volatile financial markets.