House prices up, reversing February dip, says Nationwide

Tuesday 30th March 2010

House prices in the UK were up by 0.7 per cent month-on-month in March, but the annual rate of price inflation slowed slightly during the month.

The figures from Nationwide found the average price of a home in March was £164,519, up from £161,320 the month before.

The building society said the stamp duty savings for first-time buyers announced in last week's Budget were likely to save them £1,368 on average.

While house prices for March were up, Nationwide said the annual change was down to nine per cent, from 9.2 per cent in February. But seasonally adjusted prices for March were up 0.7 per cent, reversing a 0.8 per cent fall seen the month previous.

Martin Gahbauer, Nationwide's chief economist, said: "At £164,519, the average price of a typical property is nine per cent higher than a year earlier.

"The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January's large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather."

For the first quarter of the year, London saw the strongest house price growth, with the north-west the only English region where prices fell.

Mr Gahbauer added: "With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.

"At the same time, the number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative. If this trend continues, we are likely to see relatively few properties changing hands, but with prices fairly stable."

While Howard Archer, chief UK and European economist at IHS Global Insight commented: "The Nationwide data reinforces our suspicion that house prices will be erratic in 2010, and may very well be no better than flat over the year.

"Admittedly, it remains to be seen how much support to housing market activity and prices comes from the government bringing in a stamp duty holiday for the next two years for first-time buyers on all properties costing up to £250,000."

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