It is a blow to the property market as earlier this week the Nationwide index showed that prices fell 0.2% in April. It is the fourth time in five months that prices have declined and they are 0.9% lower than a year ago.
The Halifax index also shows that annually prices are now down 0.5% but on a quarterly basis they are up 0.3%, the first quarterly increase for seven months.
‘Despite the slight improvement in the underlying trend in recent months, house prices continue to lack real direction with the current UK average price little different to where it was at the end of 2011,’ said Martin Ellis, Halifax housing economist.
‘The monthly figures continue to fluctuate quite widely with a 2.4% decline in April, wiping out March's 2.2% rise,’ he added.
He pointed our that the ending of the stamp duty holiday for first time buyers in late March appears to have boosted home sales early this year as buyers strove to beat the deadline. ‘This has probably contributed to the volatility in house prices in the last few months. We continue to expect little overall movement in prices as the UK economic situation remains challenging,’ Ellis explained.
The Nationwide also expects house prices to remain static in 2012. ‘A significant acceleration in prices or activity is unlikely in the near term. Housing market activity is likely to remain subdued, with prices showing little growth or moving modestly lower over the next twelve months, ‘ said Robert Gardner, Nationwide's chief economist.
There has in effect been no change in the average UK house price so far this year, according to the Halifax. The UK average price in April 2012, at £159,883, was virtually the same as in December 2011 at £159,888.
However, there has been an increase in sales. The total number of completed house sales in the first three months of 2012 was 11% higher than in the same period last year, the Halifax index shows. Sales were also the highest in the first quarter of any year since 2008.
Britons are becoming more confident in the outlook for the housing market, according to the latest Halifax Housing Market Confidence tracker. Nearly four in 10 respondents predicted that house prices nationally will increase over the next year, almost double the 20% that believe house prices will fall.
As a result, the headline House Price Outlook balance, that is the difference between the proportion of people that expect house prices to rise rather than fall, increased to an overall balance score of +19% points in March from +7 in the previous survey in January. This is the most positive reading since Halifax began measuring consumer confidence in the housing market a year ago.
