House prices post first annual decline in 12 yrs

LONDON (Reuters) - House prices fell for the sixth month running in April to stand 1.0 percent lower than a year ago -- the first annual fall in more than 12 years, the Nationwide building society said on Wednesday.

That came a day after a Bank of England policymaker warned there was a danger of home prices crashing by more than 30 percent and as another survey showed the consumer mood at its bleakest since the economic slump of 1992.

The economic evidence paints a grim backdrop for Prime Minister Gordon Brown on the eve of local government elections in which his Labour Party is expected to fare badly against resurgent Conservatives, who are consistently leading national opinion polls.

Nationwide said house prices fell 1.1 percent this month to 178,555 pounds, after a downwardly revised 0.7 percent fall in March -- more than twice the rate of decline forecast by analysts.

"Rapidly deteriorating sentiment over the housing market also heightens the risk that house prices could fall more sharply over the next couple of years," said Howard Archer, economist at Global Insight.

"Consequently, it is very possible that a drop of more than 20 percent in house prices could occur over the next couple of years."

Britons, about two thirds of whom are home owners, are particularly sensitive to house price moves.

DOOM AND GLOOM

The GfK/NOP consumer confidence index fell to -24 from -19 in March as people turned gloomier on the state of the economy and their own personal finances.