- The Washington Times - Thursday, November 27, 2008

LONDON (AP) - The drop in British house values slowed in November, although prices were still nearly 14 percent lower than a year ago as banks curbed lending and worried buyers avoided the property market amid the credit crunch, a housing survey said Thursday.

Nationwide Building Society’s monthly house price report found that the average British home sold for 158,442 pounds ($244,245) in November, down 13.9 percent _ or 25,600 pounds _ from the same month a year earlier.

The fall indicated a slight easing in Britain‘s housing market crash, as it was less dramatic than the 14.6 percent annual fall Nationwide recorded in October.

At the same time, the month-on-month fall in house prices slowed to 0.4 percent in November _ down from the 1.3 percent drop in October.

Nationwide’s Chief Economist Fionnuala Earley said the moderation in the housing market’s slide was largely the result of the Bank of England’s surprise 1.5 percent cut in the base interest rate earlier this month.

"While not aimed directly at the housing market, such a substantial shift in the bank rate will help a significant number of existing and potential home buyers," she said.

However, Early warned against viewing the figures as evidence that house prices would stop falling.

"With the economy in recession, conditions do not appear very favorable for a swift recovery in the housing market," she said. "The labor market is weakening, which will inevitably hinder market demand."

Analysts at IHS Global Insight predicted that house prices would fall by a further 15 percent in 2009, following falls of 14.5 percent in 2008.

The Nationwide report came as Britain’s prime minister met with officials from the housing industry to tell them the government was working to help them recover from the downturn.

"We’ve taken a number of initiatives in relation to housing but are ready to look at more," Prime Minister Gordon Brown said. "We are trying to encourage the mortgage industry back into business."

He added that Britain’s housing market was better placed than those in many other countries, including the U.S. and Spain, to regain strength quickly.


Associated Press Writer David Stringer contributed to this report.

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