LONDON (Reuters) - House prices fell for a fourth month running in February to post the lowest annual rate of inflation in more than two years, the Nationwide Building Society says.
It said house prices fell 0.5 percent on the month in February after a downwardly revised 0.3 percent fall in January. Analysts polled by Reuters had forecast a flat reading on the month.
Annual house price inflation fell to 2.7 percent — its lowest since November 2005 — from 4.2 percent in January.
“The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year,” said Fionnuala Earley, Nationwide chief economist.
The average house price fell to 179,358 pounds from 180,473 pounds.
The figures add to evidence of a downturn in the housing market and may heighten worries of a sharp retrenchment in consumer spending.
A survey earlier this week showed consumer confidence fell in February to its lowest in more than 13 years with shoppers more reluctant to splash out on big purchases than at any time since 1990.
Nationwide is forecasting flat house prices in 2008 as a whole but many private economists are predicting falls of up to 5 percent.
The Bank of England has cut interest rate twice in the past three months and investors expect further cuts over the course of the year.