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									     ND HOUSE PRICES
                                   *** STRICTLY EMBARGOED UNTIL 7.00AM THURSDAY 30TH APRIL 2009 ***
                                                House prices fall slightly in April
    •      The price of a typical house fell by 0.4% in April

    •      Housing measures in the budget are welcome, but are unlikely to turn things around

    •      Economic fundamentals will continue to dominate housing market prospects



    Headlines                                                                           April 2009                            March 2009
    Monthly index * Q1 '93 = 100                                                          300.0                                  301.1
    Monthly change*                                                                       -0.4%                                  0.9%
    Annual change                                                                        -15.0%                                 -15.7%
    Average price1                                                                      £151,861                               £150,946

    * seasonally adjusted

    Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:

    “The price of a typical house fell by 0.4% in April. This reverses some of the rise seen in March, but is
    in line with our expectations, given the current economic conditions. April’s decline leaves the average
    price of a typical house at £151,861, down 15% from 12 months ago. The 3-month on 3-month rate
    of change, generally a smoother indicator of the short-term trend in prices, improved to -3.1% in April
    from -4.1% in March.

    Budget measures unlikely to boost housing market

    “The chancellor announced several measures aimed at boosting the housing market in his Budget.
    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. 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.


          Expected change in availability of secured credit to
                                                                                       Expected change in demand for all secured lending
            households over next 3 m onths (net balance of
                                                                                                over next 3 mths (net balance)
                            responses)
                                                                                   0
   20                                                                             -5
                                                           14 .8
   15                                                                            -10
   10                                                                            -15
    5
                                                                                 -20
    0
   -5                                                                            -25
  -10                                                                            -30                                        - 2 7 .8        -28
  -15                                                                            -35
  -20              - 16 .8                                                       -40             - 3 6 .5
  -25                                         -21.2
                                                                                                Sep-08                     Dec-08          Mar-09
                  Sep-08                    Dec-08        Mar-09
So urce: B ank o f England Credit Co nditio ns Survey
                                                                             So urce: B ank o f England Credit Co nditio ns Survey.




    1
      Actual average house prices are higher even though the monthly index shows a fall because of seasonal adjustment. It
    reflects that prices in April did not rise as much as we would have expected them to given the seasonal pattern in prices.
            HOUSE PRICES
           ND

                                                          *** STRICTLY EMBARGOED UNTIL 7.00AM THURSDAY 30TH APRIL 2009 ***


          Falling prices mean more first-time buyers are exempt from stamp duty …

          “The extension of the stamp duty holiday is also welcome in so far as it reduces the transactions costs
          for borrowers at the least expensive end of the market. While there has been no further increase in
          the amount of the tax free threshold, the impact of falling prices since the initial extension was
          announced in September 2008 means that more buyers could now benefit. Before the increase in the
          threshold the typical house price was above the old £125k limit everywhere except the Northern
          region. As house prices have come down, the typical house price is now below the new £175k
          threshold everywhere but in London and the Outer Metropolitan region. And for first-time buyers, only
          London has a typical house price above the threshold.

          Typical first-time buyer house prices and stamp                                                                                                     House price expectations and approvals
                                                                                                                                             6.00                                                                         140,000
                                duty
275,000                                                                                                                                                                                                                   120,000
250,000            Q3 2008           Q1 2009                                                                                                 4.00
225,000                                                                                                                                                                                                                   100,000
                                                                                                                                             2.00
200,000                                                                                                         £175K threshold
                                                                                                                                                                                                                          80,000
175,000                                                                                                                                      0.00
150,000                                                                                                                                                                                                                   60,000
125,000                                                                                                                                      -2.00
                                                                                                                                                                                                                          40,000
100,000                                                                                                                                      -4.00                 Expectations
 75,000                                                                                                                                                                                                                   20,000
                                                                                                                                                                   Approvals (rhs)
 50,000                                                                                                                                      -6.00                                                                        0
 25,000                                                                                                                                           Mar-     Sep-     Mar-     Sep-      Mar-   Sep-   Mar-   Sep-   Mar-
      0
                                                                                                                                                   05       05       06       06        07     07     08     08     09
                                  E Mids
                                           W Mids




                                                                                      London




                                                                                                                 Scotland

                                                                                                                            N Ireland
                                                                                                        Wales
                                                                          Outer Met




                                                                                                                                        UK
                   Y&H
           North




                                                    East Ang
                                                               O S East
                         N West




                                                                                               S West




                                                                                                                                             So urce: Natio nwide, B ank o f England



Source: Nationwide



          …but this is unlikely to be enough to stimulate significant activity

          “It is possible that the extended period of the higher threshold will be more of an incentive for first-
          time buyers to enter the market now that affordability has improved due to falling interest rates and
          house prices. But it seems more likely that, for the most part, buyers will remain cautious as long as
          they think that prices will continue to fall. The latest data from Nationwide’s Consumer Confidence
          Survey shows that consumers still think that prices will fall over the next six months. However, there
          has been a significant moderation in the rate at which they think prices will fall. This, along with the
          recent pick up in buyer enquiries and the increase in house purchase approvals in February, has
          encouraged some to suggest that this is the turning point in the market. While affordability is indeed
          more favourable and there does seem to be some cautious optimism from some quarters, it is still far
          too soon to say that this is the start of a solid revival in the market.

          Wider economic conditions will dictate the outlook for the housing market

          “The housing market is very sensitive to income and, as a result, conditions in the labour market are
          crucial to its performance. The economy is now in the deepest recession since the Second World War
          and unemployment is continuing to increase, with the latest data showing that it breached the two
          million mark. Even though negative inflation will mean that real earnings will be increasing, it is likely
          to be some time before this feeds into a strong enough change in sentiment to encourage a full scale
          revival in the housing market. 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.”


          Fionnuala Earley                                                                                                                                   Roy Beale
          Chief Economist                                                                                                                                    Media Relations Officer
          Tel: 01793 656370                                                                                                                                  Tel: 01793 655689
          fionnuala.earley@nationwide.co.uk                                                                                                                  roy.beale@nationwide.co.uk
                             HOUSE PRICES
                             ND

                                                     *** STRICTLY EMBARGOED UNTIL 7.00AM THURSDAY 30TH APRIL 2009 ***
                                        Average UK House Price                                                        Long Term Real House Price Trend

£195,000                                                                                                                      Base: Q1 2008 Trend: 2.9% per annum
                                                                                              £200,000
                                  Average House Price                                                                                    Real House Price
£175,000                                                                                      £180,000
                                                                                                                                         Expon. (Real House Price)
£155,000                                                                                      £160,000
£135,000                                                                                      £140,000
£115,000                                                                                      £120,000
 £95,000                                                                                      £100,000
 £75,000                                                                                        £80,000
 £55,000                                                                                        £60,000
 £35,000                                                                                        £40,000
       Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr-                                                            Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
         99  00   01   02   03   04   05   06   07   08   09                                                             79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09



                                    Annual % Change in House Prices                                                   3 Months on Previous 3 Months% change

                    15.0%
                                                                                                                       4.0%
                    10.0%
                                                                                                                       3.0%
                     5.0%                                                                                              2.0%
  annual % change




                                                                                                   3 month % change




                                                                                                                       1.0%
                     0.0%
                                                                                                                       0.0%
                     -5.0%                                                                                            -1.0%
                    -10.0%                                                                                            -2.0%
                                                                                                                      -3.0%
                    -15.0%
                                                                                                                      -4.0%
                    -20.0%                                                                                            -5.0%
                          Apr- Aug- Dec- Apr- Aug- Dec- Apr- Aug- Dec- Apr-                                           -6.0%
                           06   06   06   07   07   07   08   08   08   09                                                 Apr-       Aug-         Dec-   Apr-    Aug-   Dec-   Apr-   Aug-   Dec-   Apr-
                                                                                                                            06         06           06     07      07     07     08     08     08     09

                             Historical Data


                                Month       Monthly Index         Monthly Change   Latest 3 months on                      Monthly Index              Annual Change       Average Price
                                             Q1 93 = 100               %           previous 3 months                        Q1 93 = 100                     %                   £
                                            seasonally adjusted                         % change                         not seasonally adjusted



                               2008 Apr         353.0                 -1.2               -2.4                                   356.2                      -1.0            178,555
                                   May          344.0                 -2.6               -3.6                                   346.3                      -4.4            173,583
                                    Jun         340.2                 -1.1               -4.4                                   343.9                      -6.3            172,415
                                     Jul        334.3                 -1.7               -5.1                                   337.8                      -8.1            169,316
                                   Aug          328.0                 -1.9               -4.9                                   328.5                     -10.5            164,654
                                    Sep         322.6                 -1.7               -5.0                                   322.8                     -12.4            161,797
                                    Oct         317.9                 -1.5               -4.9                                   316.9                     -14.6            158,872
                                   Nov          316.4                 -0.5               -4.6                                   316.1                     -13.9            158,442
                                    Dec         308.1                 -2.6               -4.3                                   305.3                     -15.9            153,048
                                    Jan         304.2                 -1.3               -4.1                                   300.2                     -16.6            150,501
                                    Feb         298.5                 -1.9               -4.8                                   294.7                     -17.6            147,746
                                    Mar         301.1                  0.9               -4.1                                   301.1                     -15.7            150,946
                               2009 Apr         300.0                 -0.4               -3.1                                   302.9                     -15.0            151,861
HOUSE PRICES
ND

                  *** STRICTLY EMBARGOED UNTIL 7.00AM THURSDAY 30TH APRIL 2009 ***
Notes:

Indices and average prices are produced using Nationwide's updated mix adjusted House Price
Methodology which was introduced with effect from the first quarter of 1995. Price indices are
seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are
based on a monthly data series starting from January 1991. Figures are recalculated each month
which may result in revisions to historical data.

The Nationwide Monthly House Price Index is prepared from information which we believe is collated
with care, but no representation is made as to its accuracy or completeness. We reserve the right to
vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for
regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third
party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow
for inflation.

More information on the house price index methodology along with time series data and archives of
housing research can be found at www.nationwide.co.uk/hpi

Photographs of our economists are available at: www.nationwide.co.uk/mediacentre/economist.asp

								
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