The Nationwide Building Society has now cited rises, in their house price indices, for three times out of the last four months. The latest data showed house prices rising by 0.5% for the month of March. This leaves the average house price at £164,751 and the latest quarterly figure (a more accurate guide) at +0.6%. This is not a big figure, but at least it’s a positive in a market currently surrounded by negative attitudes.
However, these modest rises are failing to keep pace with inflation (the Consumer Price Index shows the current rate of inflation at 4.4%), so in real terms, property value is still on the decline. Following the release of the figures, Nationwide said that these modest rises were unlikely to be the start of a consistent climb and that it expected house prices to be flat or even fall slightly, over the rest of the year.
Robert Gardner, Nationwide’s Chief Economist said: “The economy entered a soft patch at the back end of 2010, and there have been few signs of a strong bounce-back. The jobs market remains challenging and Nationwide’s Consumer Confidence Index suggests that sentiment has fallen to an all-time low in recent months.”
The figures from the building society add to the confusing picture that is the current housing market. Whether property value is going up or not, the market is currently seeing a very low level of transactions with a lack of new sellers coming to market. Highlighting this, Lloyds banking group have recently published data that suggests that home sales have fallen a whopping 47% since 2007.
February house price index figures for Halifax, Land Registry and Hometrack were all negative but Rightmove agreed with Nationwide’s positive spin by saying that asking prices had gone up by 0.8% in March. Property information website Zoopla does not agree, reporting that property prices had fallen by 11% since last summer.
As always the figures vary widely geographically (London continues to be buoyant) with the top end of the market relatively unaffected. Rather worryingly, the low volume of buying and selling is distorting house prices, allowing the market to keep its head above water when the reality is rather different and a substantial downturn should be coming apparent.