House prices fell by record 15.9% in 2008

First-time buyers might whoop for joy, homeowners will sigh, then shrug their shoulders and think about which room to redecorate first. For after the initial horror of noticing that three years worth of growth has been wiped off the value of their home, now worth an average £153,048 according to Nationwide's latest figures, stoicism is the most likely response.

The falling housing market is being viewed by some as a chance to think of their house as a home again. Instead of wondering where to move for maximum returns, owner occupiers are contemplating the colour of their new curtains.

That is, if they are not planning on moving for the next few years. For anyone in the unfortunate position of having to sell, the 15.9 per cent annual fall, coupled with the prospect of having to accept an even lower offer from a bargain-hunting buyer to achieve a quick sale, is grim. For any of the owner-occupiers wanting to release equity for retirement, it is grim - they will probably be offered a smaller loan. Even for first-time buyers hoping to take advantage, it is grim, for as long as house prices are falling, mortgage lenders are not going to offer competitive deals for buyers who need big loans. And until lenders start offering these deals, prices will keep falling.

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