"If 1st time buyers cant buy, this has immediate market impacts"

Rubbish !! The banks didn't give a stuff about FTBs 6 months ago when they were busy courting BTL amateurs, did they ?But, hey, if you're stupid enough to want to buy now, you deserve all the negative equity you're going to accrue.

Justin Thyme, London, UK

Am in agreement with Andy in Preston: the way we view housing is obscene; a house is a necessity, not a luxury and certainly not a means for the more fortunate to make huge gains at the expense of others. Everyone has the right (yes, I did mention' the right') to have a secure home.

Mary, Saintes, France

Caroline, london is set up for the biggest hit of all.
It has the highest ratio of buy -to-lets, and is the home of the finance sector.
On what do you base your claim of prices 'probably' continuing to rise?

steven pill, Bedale,

Caroline, London -
I very much doubt that house prices in London will continue to rise. London property is the most overpriced in the country and will thus experience the biggest percentage falls over the next few years.
It's happened before and it will happen again.

KC, London, UK

The 3 most likely lenders to go bust are Bradford and Bingley, Alliance ad Leicester, and Halifax.

Shall we all take our money out of these organisations and put it in the Nationwide?

After all, they never reward us for being loyal custmers. In fact, they take advantage of our loyalty.

paul, leeds,

A 1% drop or even a 10% drop is no cause for panic. The prices have increased hundreds of percents in the last few years. Correction is needed for long term viability.

Hamad Lone, London, England

Wow..

Mamoun, Milan, Italy

Rich, try reading the article again.
"Prices are now 1 per cent lower than this time last year"
"On a monthly basis, the average price of a home fell by 1.1 per cent in April"
"pace of monthly decline is increasing"
Great news for me, bad news for Buy to Let wannabes who caused this bubble!

a, Ealing, UK

1% year drop from last year. But April has dropped 1.1% alone, so if you annualise the April rate, that is a 13.3% drop. Economist predictions are usually conservative as they "anchor and adjust" their predictions on old estimate. I expect a bigger drop than 13% as prices are at first sticky.

a, Ealing, London

Even as recently as October the index showed price increases of 9.7% per year and already we are in negative territory. By october 2008 at this rate the index will show 10% year on year declines (not adjusting for inflation).

howard, london,

Prices go up then they come down, hardly news is it? Things are at last returning to normal, this is positive is it not? If your buying a home to live in for 10-15 years what bloomin difference does it make. Negative equity is only a problem if you can't service the debt, prices will rise again.

kevin, sleaford,

I think they have a long way to go yet - does anyone think this represents fair value? tinyurl.com/4lr62k

...and this is the kind of prime property that Darling is proposing to underwrite with taxpayers' money - the world has gone insane.

David Hall, Stafford, UK

With headlines like this - who in their right mind would buy now? As future declines look obvious and will probably actualy overshoot - it is not clear where where the market will bottom out - there is no floor here.

David Nammory, Liverpool,

It's fine to say that people are "mugs" for taking 100% mortgages but in the rosey markets of yesteryear with excessive house prices and disillusioned expectations of continuing equity growth against borrowing risk, 100% or close to was a first time buyers only choice, regardless of RPI, AEI and CPI

dB, Cheltenham,

I can't understand why so many young people want to be saddled with a mortgage - just shows how conservative most people are today if the most important aspiration is owning your own house. give me an affordable rental flat anyday!

Kat, Cambridge,

I politely disagree Nersen Pillay, 1.1% is a steep fall for a month, it equates to 12% or £24 000 pounds off an average home over a year.

Actually one should really add in inflation to nominal values, so this figure would adjust to 14% in real price terms. For me this could be called a steep drop

Lenny, Coventry,

Where are house prices in London increasing Caroline, (London, UK)?

I don't see them.

Austin Tassletine , South West, UK

Now there's a new dinner party conversation topic ...

"How little is your house worth ?" .

Pedro, Stratford,

a sensible correction of 15% or so over the next couple of years will be fine. the ones who will suffer are the fools who didn't have the sense to save for a decent deposit and took 100% or greater mortgages. they don't deserve to keep their houses anyway...mugs

phil, york, england

this is good, mr brown says he wants to get the housing market moving again, !!! Well how is he going to do that, if peoples salaries are not moving by 400% ? I thought he was an economist, he has made a pigs ear out of us

kay, london,

Since all these banks are international entities, isn't pumping all this money in to them effectively subsidising their foreign customers as well?
I almost laughed as the government poured money in to them whilst giving them a good talking to. Within the hour, banks were raising their rates again

martin, bridgwater,

A 1% drop annual drop in the 'average' house prices is not a 'steep drop' lets get real and put things in perspective. Average is just what it says, some house prices have gone down some have stayed the same and some have gone up. How the figures are presented is down to politics and headlines

Anthony J, Alton, UK

Is 1% a "STEEP" fall????

Low quality headline

Nersen Pillay, London,

And 64,000 people took out a mortgage last month to buy an asset which will lose a third of its value in the next two years. No wonder the lenders laugh all the way home to their Georgian piles in the shires.There's one born every minute. Or rather at 64000 a month there's one born every 40 seconds.

eric campbell, harrogate, uk

Dennis Muller "we all have the press to thank for that"

- as we did when prices were shooting up uncontrollably.

Jonathan, farnham, UK

There is nothing left to fuel the housing market anymore and a sharp correction of about 30% is now a certainty. The days of risky lending are over. The bankers have made their millions and have rode off into the sunset. Those who have over borrowed will feel a lot of pain in the next 5 years.

Chris, Oxford,

Perhaps if the lenders had stayed with traditional concepts of a minimum deposit of 10% and no further advances except for genuine home improvements, the banks would have had more money to lend to business and the building societies would not have been so reliant on market funding, Bubble avoided!

Chris, Bournemouth, UK

I don't know what all the fuss is about. Everybody knows houses are 30% overvalued, and that falls were long overdue.....

what's a measly 1%?

michael clarke, Windsor,

house prices will revert to long term averages relative to incomes. yes add in inflation and the drop is much worse this year!

visit the financial ninja - below url to see how the future looks.

http://benbittrolff.blogspot.com/

Brown and the banks have bust the boom they caused.

peterthepainter, nottingham,

Ooh...! What a 'steep drop' 1%. The usual 'Times sensationalism'.

Billy Bop, London, UK

Estate agents are still fuelling big hopes to the vendors in order to protect their commissions instead of doing realistic evaluations and advise vendors of what they can truly get for their property. Risky strategy to take sole advice from an agent who never used to move a finger to close a deal.

Paula, London, UK

Factor in the demise of Sterling against the Euro and they've fallen another 16% .

That's one way of getting rid of an asset bubble, inflate your currency.

Then add inflation, which in food and energy terms is running way higher than the government figures would imply.

Ralph, London, UK

It's worse than it seems actually. The 1% drop includes the rise at the end of last year. From now on we'll be hearing about a bigger drop every month as we get away from those growth months. Lets face it, houses are too expensive if you take income into consideration. The bubble has burst.

John Thomas, Cricklewood, England

Steep - 1%. Hmm. Does the headline writer have an interest in prices truly droping steeply in the future?

Diana, derby,

Expect a rapid rush for the exits as landlords abandon the buy to let model and try to offload their properties onto those young enough not to recall the last property crash or those who are too naive to comprehend negative equity. The only way to make money now will be to short sell housebuilders

Stewart, York,

i have been trying to be a first time buyer for the last 15 years!!

every time it looked as if i was in a position to jump on the housing ladder, the greed of the estate agents bumping up prices to get more commission put owning a property out of my reach.

need to drop about £60,000 now!!!

Matt, Horley,

Considering that the market needs a 50% correction, we still have a long way to go.

Fabio C, London, UK

I for one welcom the drop in prices it will help me trade up in the future. But surely any big drops (i.e. 20%+) in prices will cause most people, me included, to tighten their belts and this is bound to have very serious repercussions for the entire economy.

Richard, London, UK

Home-owners and househunters have been hit by two additional whammies, not mentioned above. Home Information Packs and Stamp Duty at 3% for most people. The cost of moving for most of middle-England is £20K minimum and half of that is stamp duty These expenses come out of rapidly decreasing equity.

Gill, Berkhamsted, UK

In the US, percent annual growth in family homes went from about +10 to -12 in two years. When you consider that during the worst of the 90s this index didn't drop much past -6 percent you know things are much worse this time. Negative equity has barely bitten yet some are already in dire straits.

David, London, UK

Best news so far this year...keep it up...or is that down?

Scott, Brighton, UK

Like everywhere else, London will find it's level once the absense of easy credit filters through. Either that, or London house prices will tend to infinity, and that sounds unlikely, especially if banks cut jobs.

Where are the 'Brick Chicks' and their hilarious optimism these days? I miss them

Rob, Hull,

Can they drop a bit further, please? Thanks!

M. R., Stockport,

What they fail to mention is that this is a 1% drop in prices *nationally*.

What they didn't say was that house prices in London are still increasing, and will probably continue to do so.

Those who would like to become first-time buyers shouldn't get too excited!

Caroline, London, UK

A crash takes time to take hold. People are ever opptomistic - and they will always expect a bounce. But there will be no bounce. It will be five years before housing looks like a good investment again. For those holding houses as an investment - it's time to sell or at least hedge if you still can.

jeremy, hassocks, sussex

why will sellers get desperate?Sellers will just stay put until the storm blows over & estate agents will see movement & therefore their income decline.

Simon Bell, Billericay ,

Why don't the OFT investigate the non competion in mortgage products? All lenders are basically charging the same rates once you strip out the "smoke and mirrors" marketing. They no longer track BOE base rates, don't pass on cuts and all agree they wil make serious profits on the current products

mark connelly, surbiton, surrey

Yesterday, 29/04/08, David Blanchflower (a member of the BoE's MPC) said, "a correction of approximately one third in house prices does not seem implausible in the UK over a period of two or three years if house price-to-earnings ratios are to be restored to more sustainable levels."

Huw Sayer, Norwich, England

You only have to look at the housing index to see that house prices are too high. Too much easy money for too long, it has been an amazing party but the hangover is going to be really bad.

Party Over, London,

It's not all doom and gloom, prices have dropped nearly 5% in my area so it's a great time to pick up a bargain. With many others jumping on the ladder now to take advantage, it will probably cause prices to rise again. Get in now while you can.

Deway, Graves end, UK

I'm a 28 year old Uni Grad, like many friends this is what we have been waiting for! Currently there is reduced mortgage options but living in the southeast even a year ago we werent able to get one as the house prices were out of reach. If 1st time buyers cant buy, this has immediate market impacts

Kate Browne, Tonbridge, England

Rich, its down 5% from peak, inflation adjusted makes it an 8% fall. Oh, its just the start as well...

Sam Smith, Southport , UK

With the number of new mortgage approvals at barely half of last year, it is clear that potential first time buyers are waiting for prices to drop. The longer they wait, the more they will save. Many sellers will become desperate and then some bargains will start to appear.1% is not enough to tempt.

ken, Bedford, UK

1% ?? I thought that the media was acting like 10% falls were happening every month. What was all the fuss about. Is this what you call a quiet news year?

Rich, Worcester,

best way to avoid house price crashes... is to stop them rising ridiculously in the first place.

if anythign else had risen as fast it would have been declared as run-away inflation and there would have been calls to control it.

But house prices rising is touted as a 'good ' thing????

andy, preston,

Wow
this is the best news in years!!

Mervyn, City of London,

and so the reports keep on coming! come one people dont beleive a word these banks are saying. Its all spin and gradually we are all finding out just what a load of hype and greed it all was.

Giles, Woking, UK

People have short memories dont they. In the early eighties everyone was told "Get the biggest house you can afford" cos its the best way to make money." Then we had the big crash as that bubble burst. Greedy banks led us down the same old road nd peaple were dumb enough to follow.

Trevor Marshall, looe, Cornwall,

the extra cash injection from the BoE will simply slow the rate of decline temporarily, but at least it will help UK's banks put their own houses in order. The last thing we want is a UK bank going under and really hurt the economy.

R, London,

spring thud

rich, auckland, nz

Time to get real. The Nationwide House Price Index is now 5.2% lower than 12 months ago if you include inflation at 4.5%.

Looks worse than 1% doesn't it? And remember, this includes 6 months during which the nominal index increased. These are going to drop out one-by-one with each new report.

Trevor, Romsey,

When were house prices at the same level as now? Just over a year, probably, if they have only fallen 1% in that period. So everyone who bought before, say, January last year is still showing a "profit" on purchase. Let us hope this small correction gets rid of ridiculously high mortgage levels.

John Claxton, Portishead, United Kingdom

"Weakening housing sentiment"... We all have the press to tank for that

Denis Muller, Redhill,

Genuine homeowners have no concern, unless they plan to downsize, as they have no mortgage debt. Those seeking to trade up will welcome the downward trend in prices.

Paul, Coventry,