Figures for April were down 1.4% compared to March. However, it’s worth remembering that March’s index showed no change compared to February.
It will come as no surprise at all to see me caution against this monthly figure though.
As ever, we recommend that the three month on three month figure is a much better indicator of what’s happening within the market. That said, this month, this still showed that prices were 1.2% lower in the quarter to April than they were the three months before.
Unfortunately, it continues to be uncertainty that is affecting consumer confidence. This is having the knock on effect of constraining housing demand which, in turn, emerges as downward pressure on house prices.
At the same time, we’re starting to see some pressure in the opposite direction too.
Research that we issued last week demonstrated that, over the past three years, there has been a substantial decline in mortgage payments – around 21% on average.
Indeed, this is the only housing expense category that has reduced between March 2008 and March 2011. By comparison, those paying rent rather than a mortgage have seen their housing costs rise by 10% over the same period.
In addition, an increase in the number of people in employment will also provide some support for house prices.
We expect this to slow the rate of decline and indeed we have started to see prices stabilise.
Mike Jones is sales director of mortgages at Lloyds Banking Group
