House prices up 0.9% in March
Tentative signs of a recovery in the UK housing market have been reinforced today with the Nationwide house price index showing a 0.9% month-on-month increase in the average cost of a home.
According to the building society, March saw the first rise in values since October 2007, with the increase taking the annual decline in prices down from 17.6% in February to 15.7%.
In terms of cost, the average UK home comes in at £150,946 and Nationwide points out that the annual drop in March was distorted by a sharp decline in the market a year earlier.
The lender describes the turnaround as “welcome” but its chief economist, Fionnuala Earley, warns “it is far too soon to see this as evidence that the trough of the market has been reached.”
She explains that it will take time for cuts in interest rates and the Bank of England’s efforts to restore the economy through quantitative easing to bring about a sustained recovery in house prices.
However, other reasons for homeowners to be cheerful include a 19% rise in new mortgage approvals in February, as reported by the Bank of England and recent figures from the Royal Institution of Chartered Surveyors showing a rise in new buyer inquiries.