There was some good news for the UK housing market this week as one of the leading house price
indices showed a rise in average property prices in March. The figures from the Nationwide Building
Society showed that house prices rose by 0.5 per cent in March.
House prices rising regionally
The increase in March means that house prices are now 0.1 per cent higher than they were twelve
months ago, at £164,751.
The Guardian reports that prices rose by 1 per cent in the first three months of 2011 in 8 of 13 UK
regions. ‘Yorkshire and Humberside saw the strongest quarterly rise of 3.4 per cent, while Northern
Ireland’s house prices were weakest with a 2.2 per cent fall. Prices in London rebounded in the first
quarter with a 2.3 per cent increase.’
Robert Gardner, the Nationwide’s chief economist, still has a pessimistic outlook for UK house
prices. He said: “The outlook remains uncertain, but all things considered this is unlikely to mark the
beginning of a strong upturn in prices.
“The economy entered a soft patch at the back end of 2010, and there have been few signs of a
strong bounce-back. The jobs market remains challenging and Nationwide’s consumer confidence
index suggests sentiment has fallen to an all-time low in recent months.”
Price rises ‘likely to be short lived’
Nicholas Ayre, a director at buying agents Home Fusion, agrees. Mr Ayre said: “Never has a monthly
price rise been less representative of the state of the property market.
“Given demand, the recent trend of price rises the Nationwide has observed is likely to be short
lived. In a climate of rising unemployment, rising living costs and – sooner rather than later – rising
interest rates, the demand for property is understandably suffering.
“The only thing that seems to be falling, and sharply, is consumer confidence. Is now the time to
commit to potentially the biggest financial outlay of your life? For many prospective buyers, the
answer is no.”
