HOUSE prices fell for the first time in three years this month, dropping by 0.4 per cent, according to Swindon-based Nationwide.
The company's Monthly House Price Index for October reported the largest decline in prices since February 2001.
Despite this, analysts were still ruling out a crash in the market, saying subdued growth was more likely than a sharp fall. The annual rate of house price inflation slowed sharply to 15.3 per cent, down from 17.8 per cent last month, while the price of the typical house now stands at £152,159, down from the peak of £154,299 in July.
Alex Bannister, Nationwide's group economist, said: "Following subdued house price growth in the last two months, house prices fell by 0.4 per cent during October.
"This was the first monthly fall since October 2001 and the largest decline since February 2001.
"Despite price growth over the last three months being slightly weaker than we had expected, developments remain consistent with our view that over the coming years, house prices are more likely to grow at a very subdued rate rather than fall sharply."
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