The Nationwide House Price Index reported an average fall of 1.8% for February, increasing the annual decline to 17.6%.
Commenting on the report, Fionnuala Earley, Nationwide's Chief Economist, said: “Sharp cuts in interest rates have helped affordability, but have not yet affected confidence sufficiently to boost the levels of new transaction activity or slow the pace of house price falls. Early signs of increased interest in housing, as reported by the pick up in new buyer enquiries, have yet to filter into sales, but do suggest that falling prices and interest rates are raising curiosity now, which could flow through quickly once confidence returns”.
40,000 homes were repossessed in the UK last year. This was 5000 short of the Council of Mortgage Lenders forecast, but still represents 1 in every 290 mortgages.
The CML attributed the lower number to the “strenuous efforts” made by lenders to ensure reposession was the last resort, but did not change it’s forecast of 75,000 repossessions for 2009.
Director General of the CML, Michael Coogan was positive about the effect of the new Government measures on repossessions, but warned "There seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties. "We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests."