House prices sink 0.5% in Feb
Recent interest rate cuts appear to have had little impact on the UK housing market following a bigger than expected drop in house prices during February, the fourth consecutive monthly decline.
Figures from the Nationwide Building Society revealed that prices fell 0.5% from January, taking annual growth down to 2.7%, the lowest since November 2005.
Analysts had been expecting a flat read for the month and a slip to 3.6% year-on-year from last month's read of 4.2%.
The average cost of a home in Britain is now £179,358, according to the country's fourth largest lender.
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The Bank of England has cut borrowing costs twice since December to 5.25%, but banks have failed to pass on the full benefit of the reductions.
"While there are several factors which are slowing housing market demand, from poor affordability to weakening house price growth expectations to tighter credit conditions, the fact that an economic recession in the UK seems unlikely provides some support for the overall health of the housing market," said Fionnuala Earley, chief economist at Nationwide.
"There is currently an unprecedented amount of uncertainty about future economic conditions, but if the Bank of England's central projection that the economy continues to grow is correct, conditions for the UK housing market are perhaps less gloomy than some would have us believe," she added.
Elsewhere, mortgage approvals for home purchases inched up to 74,000 last month from December's all-time low of 72,000, data from the Bank of England revealed.
