House prices have seen their biggest annual fall in a decade – so what does it mean for buyers?

Prices are far too high for prospective buyers, argues James Moore. They need to fall further as getting on the housing ladder is increasingly restricted to those able to call on the Bank of Mum and Dad

Hosue prices are falling but they could do with falling further (PA)

So addicted is Britain to constantly rising house prices that the merest hint of the market going in the other direction is accompanied by hand-wringing, tooth-gnashing and predictions of doom. The release of the Nationwide Building Society’s latest house price index served serves as a case in point.

The significance of the update is that the figures show an annualised decline of 1.1 per cent. Prices have been falling month-on-month for a while now – but this is the first time this particular index has shown a fall across the course of a year since June 2020. And that, remember, was in the middle of the pandemic. This February 2023 figure actually represents the sharpest annual decline since 2012.

The release of the data was also accompanied by a profit warning from Persimmon Homes, one of the biggest developers, a company that once tried to pay its CEO a £100m bonus (reduced in the wake of an outcry) when the sun was shining on the market a few years ago.