2:00PM New York, 7:00PM London – The UK home prices fell 0.5% in December.

Stocks in London fell after a report showed that house prices fell for the second consecutive month in December.

In London trading FTSE 100 declined 0.32% or 20.9 to 6,476.90, but rose 4% for the year compared to gain of 11% in 2006.

Of the 102 FTSE stocks 39 gained, 57 declined, and 6 were unchanged. Cairn Energy led the advancers with a rise of 3% followed by increase of 2% in Reed Elsevier.

U.K. mortgage lender Nationwide Building Society said in a press release today that house prices fell for the second consecutive month to 182,080 pounds. The price is 8,334 pounds higher than a year ago. Also the annual rate of house price inflation fell 4.8% in December compared to 6.9% in November and 10.5% in December 2006.

According to the mortgage lender, a third of the 30 towns and cities surveyed saw double digit growth in 2007. St Albans remains as the most expensive town in U.K. with an average price of almost 350,000 pounds, while Belfast saw the fastest rate of house price growth as prices rose by 200 pounds per day.

However, prices for homes in Newcastle and Durham fell 3% in the year.

Nationwide Chief Economist Fionnuala Earley believes tighter funding conditions and risk aversion from lenders has resulted in the decline in the mortgages availability for riskier borrowers, a development that is likely to “undoubtedly choke off new subprime lending in 2008”.

Bloomberg news reported today nine of the fourteen members of the House of Commons Treasury Committee said today Mervyn King’s term should be extended for another five years as his success on growth and inflation outweighs his delayed response to the ongoing subprime crisis.

Of the 102 FTSE index stocks Cairn Energy led advancers with a rise of 3% followed by gains of 2.02% in Reed Elsevier, of 1.46% in British Sky Broadcasting, of 1.33% in Persimmon, and in British Energy 1.32%.

Schroders Plc led declining 102 FTSE index shares with the loss of 2.51% followed by declines of 2.34% in Schroders Plc-NV, of 2.24% in BT Group Plc, of 1.75% in Standard Life, and of 1.45% in Severn Trent.

Banks also fell after Goldman Sachs Group reported yesterday that more U.S. banks are likely to experience more losses on subprime linked investments. Barclays shed 1.07%, Royal Bank of Scotland slipped 0.56% and Alliance &Leicester slumped 1.01%.

UBS AG said in a statement today it wouldn’t proceed on a planned acquisition of Standard Chartered Indian fund management unit. The sale and purchase agreement that was signed in January 2007 has since expired. UBS AG however contends that the decision is not linked to the $10 billion write-downs announced earlier this month. Standard Chartered Plc fell 0.32%.

Bloomberg news reported today that Spanish company Corporacion Dermoestietica has agreed to sell British unit Ultralese Limited to 3iGroup Plc for 174.5 million pounds.


1:30PM New York, 5:30 PM London – Russia and Germany led the gainers in the region in 2007.

Banks in UK fell after the Nationwide Building Society reported a drop in housing prices, for the second month in a row. December home prices fell 0.5% from November to 182,080 pounds but rose 4.8% from a year ago. Home prices fell 0.8% in November from October month.

Alliance Leicester, Barclays, and Schroders lost more than 1%.

Of the 102 stocks in the FTSE 100 index, 39 declined, 57 rose, and 6 were unchanged.

Schroders led the decliners in the FTSE 100 index with a loss of 2.5% followed by losses in BT Group of 2.2%, in Standard Life of 1.8%, and in Severn Trent of 1.45%. Tesco, Rexam, SABMiller, and International Power lost more than 1%.