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House prices across the nation are now falling year-on-year for the first time in more than a decade, Nationwide Building Society said today.

The average price of a home in April dropped 1pc from a year earlier, and by 1.1pc compared with March.

The prospect of the value of homes dropping below what they were worth this time last year raises fears that many homeowners may be pushed into negative equity, as the amount owed on their mortgage exceeds the price of their home.

The weakness in the housing market will only add to pressure on the Bank of England to reduce interest rates from their current level of 5pc.

Danny Blanchflower, one of the nine people at the central bank who votes on interest rates, warned yesterday that prices could fall by as much as 30pc in the next two to three years and, that without a sharp reduction in rates, the UK economy risked a recession .

Full article: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/30/bcnnation230.xml