March 28, 2008
Sky News senior business producer Peter Hoskins
The UK's biggest building society Nationwide says house prices are now going up by just 1.1% a year - the slowest pace of growth for 12 years.
The mortgage giant also warns that property values could fall by as much as 5% this year.
And despite the Bank of England cutting the base rate of interest to 5.25% in February, the Nationwide, along with mortgage lenders owned by rivals Halifax and Lloyds TSB, are raising interest rates on some of their most popular deals.
The reason? The 3 Month Sterling Libor Rate - that's the cost of borrowing between banks - has risen yet again today and is now well above 6% - the highest level since the end of last year.
So should we be worried? Well, even though the Nationwide is telling us house prices are likely to fall their chief economist says this is actually a good thing.
Fionnuala Earley told me "I think it's a good time for the markets to have a pause. We couldn't continue to see prices increase at the rate they were, that was unsustainable. So for the market to take stock now and have a pause now - with only a small fall - it would mean house prices would still be higher than two years ago."
And she's got a point. 2 years ago the average price of a home was a little over £162,000. Now it's more than £179,000.
That's a rise of £17,000 or 10.5%.
We know that the value of our homes aren't going up at anywhere near the double digit annual rates of a few years back and they're likely to fall in the coming months.
So, should we be worried that this is the start of something far worse or just take it as part of the natural cycle of the market as many experts tell us?