The latest house price indices published by the Halifax showed house prices down 1.4% for the month of April, citing weak household confidence. The quarterly figure is down by 1.2% and 3.7% on one year ago – leaving the average house price at £160,395. However, the other big mortgage lender Nationwide painted a slightly rosier picture for the housing market, stating that prices had fallen by 0.2% in April and that the average house price was now 1.3% lower than 12 months ago.
Commenting on the Halifax figures, housing economist Martin Ellis said: “Weak confidence amongst households, partly due to uncertainty over the economic outlook, is constraining housing demand and resulting in some downward movement in prices.” He then countered this by stating that low mortgage rates and a decline in unemployment were likely to curb the pace of house price decline.
Figures can clearly be massaged, as can be seen by the fact that a direct comparison between the Halifax’s figures in April 2010 and April 2011 would show a decline in prices of 4.9%. Instead the bank takes the previous three months and compares that with the corresponding three months of 12 months ago to ‘smooth’ the figure.
The Nationwide said that prices had been “fairly static” over the last six months with three months of rises and three months of falls in the market. Chief economist Robert Gardner managed to put a fairly positive spin on the prognosis for the housing market: “There is little evidence to suggest that price declines will accelerate in the months ahead. While the UK economy only managed a modest bounce-back at the start of the year, after the weather-induced contraction in late 2010, the economic recovery is expected to gather momentum.”
House price data from the Land Registry for March, widely regarded as being the most accurate of all the house price indices, suggested that property value was 2.3% lower than for March 2010. Of all areas in England and Wales, only London had seen prices rise. Over the coming months the movement of house prices will be decided by a number of factors; the most significant of these will be the amount of property coming to market, mortgage availability, interest rates and the state of the UK’s economy.