British house prices fell by a bigger-than-expected 1.8% in February for a record annual decline of 17.6%, according to the latest figures from mortgage lender Nationwide.
The 15th consecutive monthly fall took the price of an average house down to £147,746 sterling, the lowest level since April 2004 and 20.6% down on the peak of over £186,000 reached in October 2007.
A bleak economic outlook and a shortage of mortgage finance has sapped Britons' confidence to make what for most is their biggest investment, and a cut in Bank of England rates to 1% from 5% in October has failed to restore demand.
'Sharp cuts in interest rates have helped affordability, but have not yet affected housing market confidence sufficiently to boost the levels of new transaction activity or slow the pace of house price falls,' Nationwide's economist Fionnuala Earley said.
Nationwide also said that changes in borrowing costs since December 2007 had reduced the cost of an average monthly mortgage payment by £226 for borrowers with a standard variable rate, pointing to confidence rather than finance costs as the main barrier to new sales.
