HOUSE PRICES DOWN BUT DEMAND IS GOOD.

House prices fell by 1.1% in March, according to the latest figures from Halifax, only the third monthly decline in the last fifteen months.

It follows analysis earlier this week from Nationwide that suggested UK house price growth is slowing down.

However, the Halifax report still shows that house prices in the last three months were 2.3 per cent higher than at the end of 2013, and 8.7 per cent higher than in the same three months a year ago.

Home sales in February also increased, for the tenth successive month, to 108,940, a third higher than the same time last year. 

"Housing demand continues to be supported by an improving economic outlook, growth in employment, rising consumer confidence and low interest rates," said  Stephen Noakes, Mortgages Director.

"The recent strengthening in house price is increasing the amount of equity that many homeowners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply and easing pressure on prices."

Jonathan Harris, director of mortgage broker Anderson Harris, added: "Monthly house prices figures can be volatile so it would be premature to read too much into this fall in prices in March. Over three months, prices continued to rise so this could well be just a blip.

"The Bank of England credit conditions survey showed that lenders expect heightened demand between April and June and are preparing to do more lending on the back of this. This suggests that any dip in lending now is not the beginning of a sustained decline. The lack of stock coming to the market is the real issue slowing everything down, with buyers competing at a frenzy of open houses and on sealed bids. New homes are being built but they simply can't be built quickly enough.

"However, the Halifax believes rising house prices might persuade homeowners to cash in on their growing equity and move up the housing ladder. This would free up some housing stock and make it easier for first-time buyers."

Brian Murphy, Head of Lending at Mortgage Advice Bureau said: "While this inevitably masks regional variation, it follows on from a slowing rate of house price increases in recent months, giving  buyers peace of mind that growth appears to be moderating to a more sustainable and affordable rate.

"However, supply continues to lag behind demand. Finding the materials and skills needed to get Britain building enough is the biggest hurdle currently facing the property market. Unfortunately this is not something that can be solved overnight, but the market is in great shape to tackle this problem and continued government support will keep prices affordable."

 

*Source - The Independent



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