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UK residential property prices fall again in April

Prices fell 0.4% and the average price of a home is now £151,861 according to the April House Price Index from Nationwide, the country's larges building society. The price of a house is now 15% less than it was a year ago.

Nationwide had said after the March figures that too much should not be read into the small rise and now it is saying that recent measures announced in the Budget were unlikely to turn things around.

But it said that the extension of the stamp duty threashold might encourage first time buyers and this combined with falling prices should have some kind of effect on the property market.

The building society said the government could have done more to aid the availability of credit. 'The chancellor announced several measures aimed at boosting the housing market in his Budget,' said Fionnuala Earley, Nationwide's chief economist.

'The scheme for government guarantees for new, high-quality residential mortgage backed securities are welcome and may help to boost the amount of mortgage credit available. However, since the availability of credit is only part of the reason why the housing market is in the doldrums it is unlikely to lead to a swift turnaround in its fortunes,' she explained.

'Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further. Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise,' she added.

Earley pointed out that the effects of unemployment would have an effect the property market is very sensitive to income and, as a result, conditions in the labour market are crucial to its performance.

'That said, the correction in house prices and improved affordability conditions provide a good grounding for the market once domestic and global economic conditions once again become more favourable,' she concluded.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors said the figures were not a surprise.