UK house prices plummet 17%

London - British house prices fell by 16.6% in the year to January as the country's economic troubles deepened, a leading mortgage lender said on Thursday.

The Nationwide Building Society said the average British home sold for just more than £150 000 ($212 000) in January, a fall of 1.3% from December. The monthly decline was less than the 2.5% decline between November and December.

The three-month rate, which evens out more volatile monthly numbers, showed a 4% decline, less than the 4.2% reported last month and the fourth consecutive month of improvement.

But Nationwide's senior economist, Martin Gahbauer, said it was "too early to say that this marks the start of a sustained improvement in the short term trend."

The lender's monthly house price report said the housing market remained very quiet. Only 27 000 mortgages were approved in November - a record low - and partial figures for December suggest only a "small improvement" on that figure.

With unemployment rising, consumer confidence falling and cash-strapped banks reluctant to lend, Nationwide said there was little prospect of the market recovering until Britain began to emerge from recession or government stimulus measures took hold.

"A precondition for recovery in the housing market is an end to the deterioration in the wider economy," the lender said.

- AP