The latest house price figures from the Nationwide Building Society are as dire as expected with prices falling at an annual rate of just under 15 per cent. Average prices are now almost £30,000 less than at the same point in 2007.

More significantly, property values are currently declining at a pace of around 5 per cent every three months. This is much steeper than in the last housing recession in the early 1990s.

As I have written before, I am currently out of the housing market and I greet each month’s decline in average prices with unbridled glee.

Despite the recent declines, property remains expensive and it would be a fool who entered the market now believing that prices will rebound in the near term.

Look at the chart below which tracks the base mortgage rate from the Nationwide and the standard variable rate from HBoS.

Neither has passed through any of the recent reduction in official policy interest rates and it will be interesting to see if they do so when the MPC cuts interest rates again next week – probably by 0.5 per cent and possibly by more.

Falling prices Tighter credit An economy heading into recession

It will take more than the odd base rate reduction to turn this market around. Gary Duncan is excellent in this short video clip available on the Times website.