House prices fall for eighth month

House prices fell for the eighth month in a row during June, while annual growth fell at its fastest rate since the 1990s crash, new figures revealed today.

The crash has seen first-time buyers almost completely disappear, with the mortgage market virtually at a standstill. And today, West Midlands estate agent Nick Tart warned: "The worst is yet to come."

The average cost of a home in the UK dropped 0.9 per cent during the month to stand at £172,415, and annual house price inflation slumped to minus 6.3 per cent, the lowest level since December 1992.

The housing market downturn has now wiped 7.3 per cent – or £13,500 – off the value of homes compared with their peak in October last year, according to Nationwide Building Society.

In the West Midlands the average house price now stands at £156,219, down 3.1 per cent over the last three months, and 5.1 per cent over the year.

Local estate agent Mr Tart, a chartered surveyor with offices in Tettenhall, Albrighton and Bridgnorth, believes prices will fall by at least another 15 per cent overall, and that sellers must be more realistic when marketing their properties.

He said: "This may seem alarming but people need to remember that prices have risen by around 70 per cent in the last decade.

"Homeowners often fall into a false sense of financial security with the value of their properties.

"Everybody accepts that prices go down as well as up but so many owners convince themselves that it is something that affects the rest of the world but not them. I think so far we have seen a reduction in values of around five per cent, maybe more in some cases where the initial guide prices were pitched far too high by agents in the first place.

"Looking to the future, I think that we are nowhere near the full extent of the fall." Figures from the Bank of England released yesterday showed that mortgage approvals for house purchases had slumped to a record low.