Housing market sees a slow start to 2010

House Prices

Nationwide Building Society has reported that house prices rose by 0.7% in March balancing out the loss of 0.8% reported in February. However, the housing market has had a sluggish start to the year with a rise of 1.6% in the last quarter compared to 1.8% in the previous 3 months and mortgage applications not rising from the dip seen at the start of the year.

Nationwide report that the annual rise is now 9%, slightly reduced from the 9.2% figure seen in February and the average UK house is now worth £164,519, £14,000 higher than this time last year.

Both the Nationwide and Halifax regularly publish movements in house prices based in the mortgage applications they receive, Nationwide figures show a slightly greater rise in house prices over the past year. However the most independent and comprehensive measure is generally accepted to be the Land Registry, although their figures lag behind those published by Nationwide and Halifax. The latest Land Registry figures show house prices fell in February 0.3% and the annual rate of growth is 7%.

The sluggish start to the year has been blamed on the re introduction of stamp duty for certain homes which had been temporarily lifted at the end of 2009 and also the extended period wintery weather.

Other news confirms the sluggish nature of the housing market. HMRC have confirmed that the number of houses purchased rose in February to 58,000 however this is a long way from the December figure of 103,000. Earlier in the week figures from the Bank of England showed that the number of mortgage approvals for homebuyers fell slightly from January to February.

It seems that all the major indicators are pointing to a lacklustre few months ahead in the housing market, with only small rises in the value of houses.

With Bank Base rate at an all time low, and showing no signs of rising, despite the recent increase in inflation it will be interesting to see what impact the freeze in Stamp Duty for first time buyers purchasing below £250,000 will have and whether it will give the housing market a boost as we move into the summer.