Nationwide Reports Steep Fall in House Prices

The monthly house price index released by Nationwide showed 0.7% fall in October. This fall was the biggest decline since April-2009 and twice as steep as economists expected. The average house price in October reached to £164,381.

Mr. Adam Posen, member of the monetary policy committee of the Bank of England told that George Osborne’s spending cuts plan would cause significant damage to the economic growth of UK.Adam Posen was the only member in the committee to vote for an increase in the quantitative easing programme of the bank.

According to Nationwide, stimulating the economy through quantitative easing could help increase house prices by lowering borrowing costs and making more money to lenders.

Catherine Penman, research head at the property consultancy firm, Carter Jonas said that demand had softened in recent months but declined that prices might collapse.

“Prices are edging down but they have not gone over the edge – and nor do we expect them to,” said Catherine. There existed a far higher degree of correlation between property prices and economy, she added.

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