Nationwide: Impact of US stock market situation on UK house prices

Nationwide chief economist, Fionnuala Earley, said: "It's too early to conclude what the impact of the current jitters in the market will be, but these developments will cause some reassessment of risk in the housing sector.

"In terms of the implications for the UK housing market that could mean that wholesale funding costs will increase and that lenders tighten up their own criteria, particularly those that are very dependent on wholesale funding. However, if the Bank of England see these current developments as a real threat to the City, this is likely to reduce the risk of further increases in interest rates, counteracting some of that effect."