31 Jul

House prices drop by 1.7%

House prices drop by 1.7%

House prices fell by 1.7 per cent in July, according to the latest data from Nationwide, bringing the average value to £169,316.

This is nearly £15,000 less than at the same time in 2007 but £11,000 higher than three years ago, despite nine consecutive months of price drops.

Although property values are falling, the picture for mortgages in looking up, according to the building society.

It notes that with the Bank of England choosing to hold the base rate, swap rates have fallen, which in turn has brought the cost of fixed-rate mortgages down.

"As the cost of mortgages begins to come down, activity could be bolstered and restore some liquidity to the housing market. However this is not likely to happen overnight," Fionnuala Earley, Nationwide's chief economist, commented.

Knight Frank found that prices for prime central London residential property fell by 1.6 per cent this month, representing the third consecutive month of price drops.

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