2
Apr
'Surprise bounce' in house prices
House prices rose in March for the first time since October
2007, according to the Nationwide. The building society said that
property prices increased by 0.9% compared with the previous month.
That reduced the annual rate of house price falls from 17.6% in
February to 15.7% in March, with the average UK home costing
£150,946.
Nationwide described the change as a "surprise bounce" and
warned against concluding the market had turned.
"While the rise in prices in March is welcome, it is far too
soon to see this as evidence that the trough of the market has been
reached," said Fionnuala Earley, Nationwide's chief economist.
She added that cuts in interest rates and the Bank of England's
move to expand the amount of money in the system - known as
quantitative easing - would take time to work through into the
housing market before there was a "sustained" recovery in house
prices.
Signs of recovery?
Ms Earley said that the significant slowdown in falling prices
year-on-year was distorted by the sharp decline in the market last
year.
Nationwide's figures show that prices of flats have been more
volatile than other types of properties.
The figures come shortly after the Bank of England reported that
mortgage approvals for house purchases in Britain rose more than
expected in February.
The rise in mortgage approvals by all lenders - to 38,000
approvals in the month, up from 32,000 in January - is a good
short-term indicator of actual lending and suggests this may now
pick up.
Recent surveys from the Royal Institution of Chartered Surveyors
(Rics) have shown rising interest from prospective buyers.
Earlier this week, Bank of England data showed approvals for new
mortgages hit 38,000 in February, their highest in nearly a
year.
Simon Hayes, economist at Barclays Capital, said that thanks to
"the improvement in mortgage approvals and the rise in buyer
enquiries that Rics has been showing, there are tentative
indications the housing market may be stabilising".
"It may be six months to a year before we see a durable
recovery," he added.