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UK house prices up in March, says Halifax

UK house prices bounced back in March, rising by 1.1%, after having fallen in February, according to the Halifax.

12 Apr 2010

The latest increase pushed the annual rate of house price inflation up to 5.2% from 4.5% in February.

The rise means that the average home in the UK now costs £168,521, nearly £11,000 higher than a year ago.

"This was the eighth rise in the past nine months, taking the average price to 9.1% above the low point reached last April," the Halifax said.

The annual rate of price inflation is now at its highest since December 2007, the Halifax said. Despite this, the lender argued that the underlying trend indicated a slowdown in prices in recent months. "Prices in the first three months of 2010 were 0.6% higher than in the final quarter of 2009," said Martin Ellis, housing economist at the Halifax.

"This was smaller than the 3.6% rise between the third and fourth quarters of 2009, suggesting a slowdown in the trend rate of house price growth. "There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices," he added.

'Erratic'

The figures from the Halifax paint a different picture to those published recently by the Nationwide.

The building society reported last week that UK house prices rose by 0.7% in March, but were in fact 9% higher than a year ago.

In order to keep the property market ticking over, the government has abolished - for the benefit of first-time buyers only - the 1% stamp duty paid by people buying homes worth between £125,000 and £250,000. The temporary tax "holiday" lasts for two years until 25 March 2012.

"The Halifax data reinforces our suspicion that house prices will be erratic in 2010, and we still suspect that prices may very well be no better than flat over the year," said Howard Archer, chief UK economist at IHS Global Insight.

"Admittedly, it remains to be seen how much support to housing market activity and prices comes from the government bringing in a stamp duty holiday for the next two years for first-time buyers on all properties costing up to £250,000."