House prices fall for second month in a row

House prices have fallen for the second month in a row, according to Nationwide building society. It is the first time the cost of property has fallen in consecutive months since February 2009.

Prices fell 0.9 per cent last month, following July's 0.5 per cent decrease, bringing the average cost of a house down to £166,500. The annual rate of house price inflation now stands at 3.9 per cent. According to Nationwide, this is not necessarily bad news.

Martin Gahbauer, Nationwide's chief economist, said: "As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices.

"Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development."

Looking ahead, Howard Archer, the chief economist at IHS Global Insight, said he thought prices would fall by between 3 and 5 per cent in the second half of 2010, followed by a 5 per cent drop in 2011.

Read a full report at BBC News. ·