House prices are still falling – but at a slower rate, according to the latest figures from the Nationwide Building Society and the Land Registry.
Although Nationwide reported property prices declining a further 0.4 per cent in April, undoing part of the freakish 0.9 per cent jump they reported in March, there is some evidence that the rate of decline is slowing.
Taking a broader three monthly measurement of prices shows that they fell 3.1 per cent in the quarter to April – against falls of 4.1 per cent and 4.8 per cent in the quarters to March and February respectively. The annual rate of house price deflation fell back slightly as well, to 15 per cent from a peak of 17.6 per cent in February.
The trend seen in the Nationwide's figures was confirmed by the Land Registry data, which said prices fell by 0.4 per cent in March, the lowest monthly drop in almost a year. However, the market remains thin, making price "discovery" difficult; the number of homes changing hands dropped to 24,770 during the month, down from 36,341 in December, partly due to seasonal factors. Rising unemployment seems likely to keep the market subdued.
Fionnuala Earley, Nationwide's chief economist, said: "While affordability is indeed more favourable and there does seem to be some cautious optimism from some quarters, it is still far too soon to say that this is the start of a solid revival in the market. The housing market is very sensitive to income and, as a result, conditions in the labour market are crucial."
Simon Rubinsohn, the chief economist for the Royal Institution of Chartered Surveyors, added: "The best lead indicator of prices is actually the Rics sales to stock ratio, which has recently begun to edge upwards. This indicates that prices may begin to stabilise in the latter part of the year."