Property prices rise 0.4% in March

Low inflation, record low mortgage rates and a cut in stamp duty rates helped house prices edge up 0.4% in March to lift the average cost of a home in the UK to £192,970.

pace of property value rise is slowing
Pace of property value rise is slowing

The 0.4% rise in property values reverses a similar drop seen between January and February, according to the latest Halifax House Price Index.

The mortgage lender also reports that the annual rate of house price growth has slowed to 8.1% compared with 8.3% in February and a peak of 10.2% in July last year.

Halifax housing economist Martin Ellis comments: “House prices in the three months to March were 2.6% higher than in the previous three months. This measure of the underlying rate of house price growth increased for the third consecutive month in March.

“The recent return to real earnings growth for the first time in several years, very low mortgage rates and last December’s stamp duty changes are supporting housing demand. The rising level of house prices in relation to earnings should, however, curb house price growth and activity. The annual rate of house price growth, which has continued to ease in the first quarter of 2015, is forecast to end the year at between 3% and 5%,” he adds.

Figures released earlier this month by Nationwide are less upbeat. It reports: “UK house prices edged up by 0.1% in March though the annual pace of growth slowed for the seventh month in a row to 5.1% from 5.7% in February. UK house prices are currently around 2% above their pre-crisis levels.”

It adds: “The pace of housing market activity has remained subdued, with the number of mortgages approved for house purchase in January around 20% below the level of a year ago.”