Wednesday, September 30, 1998 Published at 06:14 GMT 07:14 UK
Business: The Economy
Housing market bubble bursts
Buyers are in a stronger position
The Nationwide said that on a month-to-month basis house prices fell by 0.2% in September, slightly less than the 0.5% drop that was seen in August.
Paul Sanderson, Nationwide's head of research, said: "The fall in prices recorded in September was slight, but after August's decline this should be seen as further evidence of changing market conditions.
"Buyer demand has clearly weakened over recent months, although a softer trend in prices may have been reinforced by a modest increase in properties coming on to the market."
South East hardest hit
He added that this slowdown had been expected, and had been led by a drop in house prices in the South East and London.
Other house price surveys also indicate that property inflation is slowing down, and in some cases house prices are declining on a monthly basis.
House prices should continue to grow, but at a more modest rate.
Mr Sanderson said that activity in the housing market was expected to remain reasonably resilient.
But he added: "It will not be immune to the inevitable slowing in the wider economy already under way. House price inflation is likely to continue to ease, with sales levels remaining at best flat, well into next year."
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