House prices and mortgage approvals fall

| March 29, 2012
House prices and mortgage approvals fall

House prices have fallen for the first time in six months, with the decline attributed to changes in stamp duty.

The average house price in March was £163,327, 0.9 per cent lower than in March 2011.

It was the largest fall in house prices since June last year.

Nationwide’s figures showed a fall in nearly every region of the UK, compared with the previous quarter.

However house prices increased by 0.6 per cent in the north of England.

They also increased in Scotland, and Greater London.

Stamp duty changes also affected mortgage approvals, which dropped to 48,986 in February, the lowest level for three years, according to figures released by the Bank of England.

The figure was 9,000 lower than in January, when first-time buyers were rushing to buy a property before the end of the stamp duty holiday.

Temporary changes introduced in 2010 meant that properties worth between £125,000 and £250,000 were exempt from the 1 per cent stamp duty, but this was re-introduced on 24 March.

The number of mortgage approvals in January reached a 25-month high but analysts warned that a dip was likely when the stamp duty was re-introduced.

In contrast, the Building Societies Association (BSA) also released new figures today, showing that mortgage approvals by building societies and other mutual lenders increased in February 2012.

Compared with February 2011 they were 31 per cent higher and they also increased, by 29 per cent, compared with January 2012.

According to the BSA’s figures there were £2.2 billion-worth of mortgage approvals in February.

Adrian Coles, director-general of the BSA, said: “Gross lending and new mortgage approvals by mutuals continued to rise year on year in February, despite growth across the market as a whole remaining relatively flat.

“The strong financial results released by a number of mutual lenders in recent months show that the sector is well positioned to offer market leading products to its customers and are open for business.”

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