UK house prices slide as job fears scare off buyers Nationwide said on Wedenesday that house prices dropped by a seasonally adjusted 0.2pc last month after a similar decline in December, and are just 0.6pc up on a year earlier. Economists polled by Reuters had expected prices to remain flat on the month, giving an annual rise of 1.4pc. The weakness in buyer demand is partly a reaction to the uncertain outlook for the economy, especially the labour market. But affordability is also part of the explanation - in particular, finding a sufficient deposit," said Nationwide's chief economist, Robert Gardner. Britain's housing market, formerly a major driver of consumer spending, has been extremely sluggish since the start of the financial crisis, a point reinforced by Bank of England mortgage data on Tuesday. Nationwide said that the average first-time buyer now opted to put down a 20pc deposit, compared to 10pc in early 2008. Mortgages with lower deposit requirements are available, but tend to carry punitive interest rates. However, for those home-buyers able to find a 20pc deposit, low interest rates mean that servicing a mortgage is now cheaper than four years ago and close to its long-run average, with initial payments now costing 31pc of take-home pay, down from 46pc in 2008.