UK property prices hardly moved last month, latest Nationwide data shows

The price of a typical home in the UK hardly moved in April with the latest index from the Nationwide, published today (Wednesday 01 May) showing a fall of 0.1%.

It means that the average property is now worth £165,586, some 0.9% higher than April 2012, and the lender says that looking on a monthly basis there is momentum in the market.

‘House prices were little changed in April after taking into account the usual seasonal effects. Nevertheless, there is some evidence that activity and prices have gained some momentum in recent months,’ said Robert Gardner, Nationwide's chief economist.

‘The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year. The annual rate of house price growth also remained in positive territory, with prices 0.9% higher than April 2012,’ he explained.

‘Similarly, the number of mortgage approvals has edged up from the levels prevailing last year and there are reasons for optimism that activity levels will continue to strengthen in the months ahead,’ he added.

He pointed out that there are signs of pick up activity, especially among first time buyers as mortgage approvals for house purchases averaged just over 53,000 per month in the first quarter of 2013, up from an average of 51,000 per month in 2012.
 
House purchase lending was also up 4% year on year in the first two months of the year, boosted by higher levels of lending to first time buyers which was up 18% at £2 billion. Also first time buyers accounted for 43% of house purchase loans in February, the highest proportion since April 2005, excluding March 2012 which was artificially inflated due to the ending of the stamp duty holiday.

He also believes that policy measures focused on increasing the availability and lowering the cost of credit, should continue to provide support and the Bank of England’s Funding for Lending Scheme (FLS) has already helped to drive mortgage rates down towards new all time lows. It has just been extended to run for another year to January 2015.

‘There are tentative signs that wider economic conditions are starting to improve, with the economy returning to growth in the first three months of 2013. Nevertheless, progress is likely to be gradual. Labour market conditions remain challenging, with the unemployment rate still elevated and wage growth failing to keep up with the rising cost of living,’ added Gardner.