UK house prices drop for first time in 5 months says Nationwide

UK house prices fell for the first time since September of 2014, according to the Nationwide house price index.

February saw a 0.1% drop in house prices as they dipped to an average of £188,446 (€258,581, $290,353) in January to £187,964, according to Nationwide, the UK's second biggest mortgage lender. There was a 0.3% increase in January 2015. The annual growth rate has dropped to 5.7%, well below the 6.8% that was recorded in January.

"This is the sixth month in a row in which annual growth has moderated," said Robert Gardner, Nationwide's chief economist.

The annual rate of growth has been declining every month since last June, when it hit a peak of 11.8%.

Gardner said: "The broader economic backdrop has remained supportive of housing market activity. Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions.

"Nevertheless, the pace of housing market activity remains fairly subdued. There was a small increase in the number of mortgages approved for house purchase in December, up 2% from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity."

Nationwide's chief economist said the trends betrayed a decline in home ownership among the younger population and first-time buyers.

He added: "If we look at the shift in tenure patterns by age over the past decade we see a marked decline in home ownership rates amongst the younger age groups. In particular, among 25 to 34-year-olds, traditionally the segment containing most first-time buyers, the proportion of households owning their own home fell from 59% to 36% between 2004 and 2014."

Renting has increased among the 25-34 age group over the same period, reaching 64% - up from 41%.