Nationwide figures echoed by new data from UK's biggest lender, which says annual fall of 3.8% is biggest drop in 15 years

The Halifax reported a 2.4% fall in house prices during May, echoing the recent Nationwide figure of a 2.8% fall that month.

The Halifax, the UK's biggest mortgage lender, said that the 3.8% drop in prices over the year to May was the biggest annual fall it had seen since 1993. The Nationwide figure for the annual fall was 4.4%.

However, despite pressure to cut interest rates to support the housing market and sinking consumer confidence, the Bank of England today announced that it is to retain the rate at 5%.

Economists were unsurprised by this decision, understood to have been driven by concern about rising inflation.

This is the second consecutive month that the bank has held rates steady, after making two cuts earlier in the year to bring the rate down from 5.5%.

The latest house price drop has left the value of average home at £184,100, said the Halifax.

If house prices continue to fall at the rates reported since the start of the year, then the decline over the whole of 2008 could be 16%.

The Halifax has predicted that house prices will continue to fall in 2009.

Topics