House prices show first annual fall in 12 years

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 says.

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 British 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 the Labour Party is expected to fare badly against the 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."

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.

That was the lowest reading since November 1992 just months after sterling was thrown out of the European Exchange Rate Mechanism and the then-Conservative government lost its reputation for sound economic management.