Property prices decline, construction contracts
May 2 (Bloomberg) -- U.K. house prices posted the first annual decline since 1996 in April as mortgage lending dried up and the construction industry shrank the most in almost a decade, industry reports showed.
The average cost of a home declined 0.9 percent to 189,027 pounds ($373,082) in the three months through April from a year earlier, HBOS Plc, the U.K.'s biggest mortgage lender, said today. That was the first annual drop in HBOS's index since February 1996. An index of building activity fell to 46.1 from 47.2 in March, the Chartered Institute of Purchasing and Supply said.
The reports show Britain's worst property slump since the end of the last recession is deepening as lenders tighten credit standards. Mortgage approvals fell to the lowest level since at least 1999 in March and Persimmon Plc, the U.K.'s largest homebuilder, said April 24 it's postponed construction on new sites after an increase in cancellations.
```There's no doubt that the housing market continues to weaken and construction is having a hard time with lower business investment,'' said Philip Shaw, an economist at Investec Securities in London. ``Given where we are with the credit crunch, we wouldn't be surprised to see another rate cut in June.''
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