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Nationwide: House prices up 0.5% in March

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

"House prices increased by 0.5% in March, leaving them 0.1% higher than March 2010. Prices have now increased, albeit modestly, in three of the past four months.

"The three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6% in March. The outlook remains uncertain, but all things considered, this is unlikely to mark the beginning of a strong upturn in prices.

"The economy entered a soft patch at the back end of 2010, and there have been few signs of a strong bounce-back. The jobs market remains challenging and Nationwide’s Consumer Confidence Index suggests that sentiment has fallen to an all time low in recent months.

"While demand is likely to remain fairly soft, a rapid increase in the supply of properties also appears unlikely. Low interest rates and a stabilisation in labour market conditions have prevented a rise in forced selling, and the subdued market outlook is deterring many sellers from entering the market.

"With the economic recovery expected to remain sluggish, the most likely outcome is that the property market will follow suit, with low transaction levels and prices moving sideways or modestly lower through 2011."

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