December sees house prices fall

House prices fell in December for the second consecutive month.

That is according to the latest figures from the Nationwide House Price Index, which show a month-on-month fall of 0.5 per cent.

The average property value was recorded as £182,080, with annual inflation falling from 6.9 per cent last month to 4.8 per cent.

"The turmoil in the  financial markets resulting from the US sub-prime  mortgage issue and the problems experienced by a UK mortgage bank have swiftly added to the pace of changing sentiment in latter months," commented Nationwide's Fionnuala Earley.

"As funding conditions have tightened and risk  aversion has risen amongst banks, there has been  a decline in the availability of mortgages at the  riskier end of the borrowing spectrum and an  increase in their price.

"This will undoubtedly choke off new sub-prime lending in 2008," she added.

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