UK house prices fall 1.9 pct m/m in Aug-Nationwide

British house prices fell 1.9% in the month of August to post their biggest annual drop since monthly records began in 1991, the Nationwide building society said on Thursday.
The decline, which was bigger than most analysts were expecting, pushed the average price of a property to 164,654 pounds ($303,700), the lowest since May 2006.
The 10th consecutive monthly decline highlights the reversal of fortune for the property market since the credit crunch took hold last summer, bringing an end to a decade in which property values almost trebled.
Nationwide said house prices in August were 10.5% lower than a year earlier. Quarterly data recorded prior to the current series suggest August's annual decline was the first double-digit drop since the fourth quarter of 1990 when Britain was mired in recession.
Concern has grown in recent months that a sharp property downturn will tip Britain's already stuttering economy into recession.
Money markets show investors are betting the Bank of England will cut interest rates swiftly once inflation has peaked, bringing them down to 4.5% by the middle of next year.
"We expect the next move in the Bank Rate to be down, but the extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in economic and housing market conditions is low," said Fionnuala Earley, Nationwide's chief economist.
She said some estate agents had reported an increase in new buyer enquiries in August but added that an increased supply of properties on agents' books would continue to act as a dampener to house price growth in the short term.