House prices reverse February’s dip

The price of a typical UK property rose by a seasonally adjusted 0.7% month-on-month (m/m) in March, largely reversing the 0.8% m/m fall measured in February, according to the Nationwide House Price Index. The smoother three month on three month rate of inflation edged down further from 1.8% in February to 1.6% in March. At £164,519, the average price of a typical property is 9.0% higher than a year earlier.

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: "The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January's large dip (chart 1), suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather. With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously. At the same time, the number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative. If this trend continues, we are likely to see relatively few properties changing hands, but with prices fairly stable."