Biggest fall in house prices for five years

Lender Nationwide intensified the growing gloom over the property market earlier after it revealed the biggest monthly fall in house prices since 2012.

The building society said the average cost of a home is now £207,699, down 0.4% in April and the second monthly slide in a row.

The annual rate of growth slowed to 2.6%, the weakest since June 2013.

Nationwide’s chief economist Robert Gardner said this was “surprising” as unemployment and mortgage rates are both at historic lows.

But he added that the cooling residential market “may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country”.

Households are facing a loss of spending power because of steadily rising inflation — aggravated by a fall of more than 10% in the pound since Britain voted to leave the EU.

Nationwide also warned housing affordability remains a key issue for homebuyers.

A typical house price is at present 6.1 times higher than average earnings, well above the long-run average of 4.3 times earnings.