UK house prices fell by 0.5% in first quarter

House Prices

House prices in Britain fell slightly at the start of the year.

The value of property in London increased but prices in Northern Ireland fell the most.

UK house prices fell in the first quarter of this year, a survey from the Department of Communities and Local Government (DCLG) has shown.

The study highlighted that prices were down by 0.5% when compared to the last quarter of 2010. Despite this, prices were still 0.9% higher than figures recorded a year ago due to a 1.2% rise in March alone.

Howard Archer of IHS Global Insight said: “The DCLG data showing a marked rebound in house prices in March do not materially alter our view that house prices will lose ground over the coming months”.

He added: “House prices are notoriously volatile from month to month and from survey to survey. Furthermore, both the Halifax (by 1.4% month-on-month) and the Nationwide (by 0.2% month-on-month) reported falls in house prices in April”.

London experienced the highest price rise where the value of the average home grew by 5.6% in the past year. This is much higher than other areas of Britain that saw a rise, such as the south-east and east of England. On the other hand prices in Northern Ireland fell by 14% over the same period, illustrating the sharp differences between Britain’s regional property sectors.

Nicholas Ayre, director of UK property search agent Home Fusion, said: “The property market, very clearly, has fragmented into a series of micro-markets. It could be many years before we see the return of a property market that trends at a national level”.

Separate data revealed by the Council of Mortgage Lenders shows that the average deposit of a first-time buyer has more than doubled from figures recorded in 2007 – the average down payment of £26,000 is equivalent to almost a year’s salary.