House prices rebound after winter fall

HOUSE PRICES last month recorded their biggest increase since September 1997, according to new figures from Nationwide. It was the latest sign that the housing market is recovering from its winter downturn.

"House price inflation could be heading back towards double figures," said Jonathan Loynes, an economist at HSBC Markets.

Nationwide, which publishes one of two monthly house price indices, said prices jumped by 1.5 per cent in March, taking the year-on-year increase to 7.6 per cent. This followed a subdued February, when prices rose by just 0.1 per cent.

Halifax said its March index, published next week, is likely to show a slight increase. Its price figures have been well below Nationwide's for the past two years, and showed a 0.5 per cent drop in February.

David Parry, Nationwide's head of planning, said: "Although spring usually produces an upturn in the housing market, there are tentative signs the recent series of interest-rate cuts have helped boost confidence."

The Easter weekend is a crucial time for the housing market, traditionally bringing a big upturn in sales.

Other indicators have pointed to a revival in the market. Surveys of estate agents and figures on mortgage approvals have both indicated the start of a recovery. In addition, underlying conditions are favourable; mortgage rates are at their lowest for more than 30 years, and properties are affordable by past standards.

However, this month's Budget dealt a blow by abolishing mortgage tax relief from April 2000.It also raised stamp duty on properties priced at above pounds 250,000, which will dampen the top end of the market.

But the biggest question mark over the outlook for house prices remains the length and severity of the economic downturn. "We have had the interest- rate cuts, but nobody has felt the pinch of rising unemployment yet," said Mr Loynes.

Although most forecasters reckon the slowdown will be moderate, few are as optimistic as the Treasury, which is predicting 1 per cent growth this year. Unemployment rose slightly last month, according to the latest official figures.

Even so, the Bank of England is expected to cut rates further. The Monetary Policy Committee could act as soon as next week, according to some analysts.

The average UK house price stands at pounds 68,308 on Nationwide's figures, up from pounds 63,493 a year ago.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Ray Whelan was arrested earlier this week
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
film
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
books
News
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
News
Wayne’s estate faces a claim for alleged copyright breaches
peopleJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Technical BA - Banking - Bristol - £400pd

£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...

Account Management Strategy Manager

£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

£60000 per annum: Harrington Starr: A leading provider in investment managemen...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice