House prices suffer first annual fall in 12 yrs

House prices in Britain fell for the sixth month running in April to stand 1.0 percent lower than a year ago - the first annual fall in more than 12 years, the Nationwide building society said on Wednesday.

Nationwide said house prices fell 1.1 percent this month to 178,555 pounds, after a downwardly revised 0.7 percent fall March and more than twice the rate of decline forecast by analysts.

House prices had stood 1.1 percent higher on a year ago in March.

The figures reinforce a raft of evidence pointing to a quickening downturn in the housing market, after prices nearly trebled in 10 years, and will put pressure on policymakers to cut interest rates again soon to shore up the economy.

"April's fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions," said Fionnuala Earley, Nationwide chief economist.

HBOS cut its house price forecast on Tuesday, saying it expected "mid-single digit" falls this year and Bank of England data showed mortgage approvals slumped to record lows in March.

Nationwide said the Bank of England's 50 billion pound mortgage swap plan for banks, announced last week, should help to stabilise wholesale financial markets.

"However, the scheme is unlikely to mean that house prices and mortgage lending will return to levels seen at this time last year," Earley said. "Weakening housing market sentiment and demand, unrelated to the financial market turmoil, will mean that we should expect slower market conditions."