House prices declined by 1.8% in February, and further falls look likely.
The decline in the property market is picking up speed. House prices fell at their highest rate for 18 years in February, according to data released today by Nationwide. The monthly fall was 1.8%, and the annual drop was equally steep. Over the last year, the price of the average UK home has fallen 17.6% from £179,000 to £148,000.
Today's survey knocks on the head any suggestion that the housing crash is over. Halifax said earlier this month that house prices had risen in January, but I think it's now clearer than ever that those numbers were a blip.
Some good news
True, there has been some good news today for property investors. Today's bank bailout gives Royal Bank of Scotland at least an extra £13bn to play with, and the bank has promised to lend an additional £9bn to mortgage borrowers this year. That follows last week's news that Northern Rock would start competing in the mortgage market once again.
So it looks like mortgages will become more freely available in 2009, but that doesn't mean we're returning to where we were in 2007.
On the downside
What's more, the rental market still looks weak - and that won't help property prices. Property website, Findaproperty.com, says that the average rent for UK residential property has fallen 4.8% over the last year. The supply of rental properties has risen as would-be sellers decide to rent out their properties rather than sell them at a low price.
And then there's the recession. That's not going to end any time soon, and unemployment looks set to rise much further. This should act as a brake on mortgage lending and house prices for a while yet.
Of course, there's no certainty in any of this and house prices could rise quickly once people are convinced that the crash is over. But when you look at the speed of the price fall in February, I think it's pretty clear we're not at the bottom and house prices will continue to fall in the near future.
So if you're thinking of picking up a property bargain, I don't think there's any need to rush just yet.
More: Falling House Prices Bring Out Potential Buyers
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