On a monthly basis, house prices increased by 2.2% in March. This followed February’s 0.4% fall as prices continue to fluctuate month-to-month as transactions levels remain historically low.
Prices in the first three months of 2012 were 0.6% lower than in the same period last year. This was the smallest fall in prices on this measure of the annual rate since October 2010 (+1.2%).
The average UK house price is at the same level as in July 2011. The UK average price in March 2012, at £163,803, was almost identical to that in July 2011 (£163,765).
Commenting, Martin Ellis, housing economist, said:
"House prices in the first quarter of 2012 were little changed compared with the final quarter of 2011, showing a decline of just 0.1%. This was the same as the slight fall recorded between the third and fourth quarters of 2011. The underlying trend therefore indicates broad stability in UK house prices. The more volatile monthly figures continue to fluctuate as a result of the historically low level of sales volumes, increasing by 2.2% in March following February’s 0.4% fall.
"Efforts by first-time buyers to beat the expiry of the stamp duty holiday at the end of March have probably increased sales in recent months and may have helped to support prices.
"We continue to expect little overall movement in prices this year provided that the UK economy does not suffer a pronounced weakening."
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains said: “The Halifax figures, which are compiled using mortgage approvals alone, are a reminder of the extent to which cash purchases are supporting the market. While purchases reliant on mortgage finance have been subdued by the availability of high-LTV mortgage finance, London has bumped up national prices over the past year, as cash purchases for high-value properties have proved a popular way for wealthy buyers to protect finance from global economic uncertainty. Halfiax’s numbers remind us the economic conditions in the UK are still challenging for mortgage lenders and borrowers are being pushed to find large deposits before they can make a purchase. But they don’t show the strength of the market for cash buyers looking to snap up well-valued property. In areas where fewer buyers have to rely on mortgage finance, prices are looking healthier than these numbers suggest”.
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