Nationwide reports that house prices fell in February, following a very strong rise in January. Traditionally buyers return back into the market in the spring, but weak economic factors make this look less likely this year.
Commenting on the figures Greg Fuzesi, Nationwide's Senior Economist, said "House prices fell by 0.2% in February following a strong 1.5% increase in January. The average house price in the UK is now £158,578, 3.7% higher than at this time last year. The continued rise of our 3 month average since October 2005 still shows strength in the market and, significantly, this discouraged the MPC from cutting interest rates in February. As we enter the all-important house buying season in March, the prospects for both house prices and interest rate policy will become clearer. It will also show whether February's fall is just a pause before the spring rush or the first sign of weak market fundamentals weighing down on prices. We expect the weaker economic factors to begin to dominate over the next 2-3 months and to prevent strong house price rises in 2006".
