The growth partly reversed the fall of 1.6% recorded in February and brought the average house price to £168,521. This is 9.1% above the market’s lowest point in April 2009, which saw average house prices descend to £154,490 after values plummeted 23% % between August 2007 and April 2009.
However, prices for the first three months of 2010 were just 0.6% up on the final quarter of 2009 compared to the 3.6% rise between Q3 and Q4 2009, suggesting a slowdown in the trend rate of house price growth.
Halifax housing economist Martin Ellis said: “The return of the lowest Stamp Duty threshold to £125,000 affected housing demand at the end of 2009 and in early 2010. The bad weather in the first two months of this year also had an impact on demand at the start of this year.”
Nevertheless, the boost to house prices in March has pushed the annual change in property prices to 5.2%, the largest increase in the annual rate of change, where one quarter’s average is measured against the same period of the previous year, since December 2007.
Ellis said: “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.”
Activity in the housing market has notably improved, with property sales in England and Wales increasing for three consecutive quarters after reaching their lowest point in Q1 2009. Sales in the second half of 2009 were a third up on the same period of 2008. In addition, Bank of England approved mortgage figures, a key sign of completed house sales, fell a seasonally adjusted 2% between January and February, compared to a 17% fall the previous month.
Yet, while sales have recovered, they are still around half the level that was seen in the latter six months of 2007.
Catherine Penman, head of research at Carter Jonas, commented: “March is historically a buoyant month for the housing market with spring just around the corner, so it’s no surprise to see prices rising again after a slight lull in February. However, with a general election less than a month away, we are likely to see prices suppressed in April when we would normally expect to see a flurry of activity post Easter.
“The property market is in a kind of limbo at present and we do not expect a clear trend to emerge until after the general election when the true state of the public finances is laid bare and a clear strategy presented.”
