Nationwide: house prices drift down
UK house prices fell by 0.2% in April, leaving the value of the typical home down 1.3% on a year earlier, at £165,609, according to Nationwide.
The decline follows a monthly increase of 0.5% in March and the three-month-on-three-month measure, which is a better measure of the underlying trend, shows a modest year-on-year rise of 0.6%.
The lender’s chief economist, Robert Gardner, points out that since November 2010 house prices have increased in three months and fallen in three months, following a common pattern for a fairly static market.
Looking ahead Mr Gardner does not expect house price falls to accelerate, given that the economic recovery should gather momentum.
He explains: “Household budgets remain under pressure, but labour market conditions have shown a modest improvement in recent months.”
The economist suggests that this combined with continued low interest rates should help support demand, while at the same time limiting the number of forced sales.
As a strong rebound in the market remains unlikely, Nationwide is predicting that house prices will continue to move sideways during 2011, or drift modestly lower.