Thursday, September 02, 2010
House prices slip, construction growth eases
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

The Nationwide building society reported a 0.9% drop in house prices in August, following a 0.5% fall in July, the first two-month fall since February 2009. The annual increase edged down from 6.6% to 3.9%. The temporary boost to prices from the reluctance of sellers to sell looks to be over, combined with post-election (and post-budget) worries about the recovery.

The fact that the market is so thin means house price movements have far less impact than in "normal" times. After the surprise rise in prices last year, the prospect is that houses will end 2010 no higher than they started. More here. Meanwhile, the big boost to gross domestic product from construction will not be repeated. The latest purchasing managers' index for the sector showed a drop to 52.1 in August, from 54.1.