House prices edge slightly higher during March

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The Independent Online

House prices edged 0.1% higher during March, helping improve the quarterly rate of decline in Britain's faltering property market, figures showed today.

The slight improvement last month came after prices dropped 0.9% in February and eased the quarterly fall to 0.6% between January and March, Halifax said.

The average UK house price stood at £162,912 in March, but this was 2.9% lower than a year earlier as values continued to fall by at their fastest annual pace since October 2009.

The three-month measure, which is generally seen as a smoother indicator of trends, suggested the market was showing some signs of stabilisation, according to experts.

The quarter-on-quarter fall in the first three months of this year was lower than in the third and fourth quarters of 2010, when prices fell 1% and 1.1% respectively.

Halifax said improvements in the UK jobs market was likely to have offered support.

Recent official figures showed the number in employment rose by 32,000 in the three months to January as more people secured full-time jobs.

But the lending giant cautioned that Government austerity measures and concerns over the wider economy were expected to hamper progress in property prices this year.

It is forecasting a 2% fall in values over the year as a whole.

Martin Ellis, housing economist at Halifax, said: "Uncertainty over the general economic outlook and individual financial circumstances are likely to constrain housing demand, resulting in some modest downward pressure on prices."

Today's figures are broadly consistent with data last week from Nationwide, which reported a 0.5% increase in March.

But Howard Archer, chief economist at IHS Global Insight, said forthcoming pressures "do not bode well" for house prices.

"We suspect that the tighter fiscal policy really kicking in from April and likely gradually-rising interest rates will exert downward pressure on the housing market," he said.

There could be some support if limited numbers of houses are put up for sale, while growth in the economy and the future path of interest rates will also be key for the property market, he added.

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