Nationwide revels extent of house price decline

The Nationwide building society has today revealed the extent of the house price drop as the credit crunch has now firmly set in, the average house price has fallen by 14.6 percent since their peak of last summer.

That equates to an average price of £158,872 and one in ten mortgage holders are now in the position of negative equity. Analysts believe that this is only the tip of the iceberg following the incredible foreclosure rate in the US.

The economy is contracting for the first time for nearly two decades and with unemployment continuing to rise, it is difficult to see where the stability in the housing market will come from.

As well as the unfortunate buyers who are in negative equity, construction companies have also borne the brunt of the crash.

The sudden nature of the decline of the property market has meant large scale job cuts in the construction industry, as well as estate agents being left to fight for scraps with the heights of a couple of years ago now just a distant memory.

Given the current climate, analysts have indicated that house prices will continue to fall, and the Bank of England believes that a further 15 percent drop in values would equate to another 10 percent of mortgage owners ending up in negative equity.

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