Commenting on figures published in their November House Price Report, Fionnuala Earley, Nationwide's Chief Economist, said: "House prices fell by 0.8% in November, reversing October's surprisingly strong performance. This brings annual house price growth down to 6.9%. This is back in line with the softening trend we have seen in the second half of the year and is consistent with our forecast of house price growth of 5-8% in 2007. The 0.8% monthly fall is the first since February 2006 and the largest monthly fall since June 1995. However, monthly data can be volatile and the sharp fall this month is partly a reflection of the strength recorded last month and in November last year. A better picture of the underlying trend is captured in the three-monthly growth rate. This too fell back into line with its softening trend in November, returning to 1.5% from the 1.8% recorded in October. The price of a typical house in the UK is now £184,099, almost £12,000 more than this time last year.
The government has now decided to extend the Home Information Pack (HIP) scheme to all homes from 14th December. This closes the final gap and all homes being sold will now be required to have a HIP from this date. It will be some time before the true impact of HIPs on the market becomes clear. The scheme could speed up the process by removing those not serious about moving, but it is likely to reduce the numbers of speculative sellers which could limit the available supply and make the house search process longer. The final outcome is likely to depend on the importance of speculative sellers in the market, which is difficult to judge. Arguably there will be more of these in a rising market, so the introduction of HIPs at this stage in the cycle may have less of an effect than at other times. But if the scheme does reduce the available supply for purchasers, given existing issues of undersupply in the UK, it is likely to offer some further support to prices in the short term."
