April 6, 2010
House Prices Up In March
U.K. house prices rose in March as potential sellers delayed putting their properties on the market, sustaining values as demand waned, said Nationwide Building Society…
The average cost of a home increased 0.7 percent to 164,519 pounds ($246,260) from February, the mortgage lender said in an e-mailed statement. Prices fell 0.8 percent last month. Home values are now 9 percent higher than a year earlier. In London, prices jumped 2.5 percent in the first quarter.
“The number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative,” said Martin Gahbauer, chief economist at Nationwide. “With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.”
The report adds to evidence of an uneven recovery in the U.K.’s housing market after last year’s slump. While mortgage approvals dropped to a nine-month low in February as banks keep a grip on credit, a lack of supply is keeping values stable. In London, a weaker pound and a revival of bankers’ earnings have helped spark a “mini boom,” Nationwide says.
London led house-prices gains in the first three months of the year, Nationwide said, pushing the average value to 280,791 pounds. The pound has dropped about 17 percent against a basket of currencies from its major trading partners in the past two years, making purchases by foreign buyers cheaper.
The capital was followed by the southwestern and southeastern regions of England as well as the East Midlands, where values all rose 2.3 percent from the end of last year.
First Time
The worst performer was the northwest of England, where values dropped 0.4 percent to an average of 136,984 pounds.
With an election only weeks away, Chancellor Alistair Darling is trying to boost people’s ability to buy homes by raising the threshold for taxing purchases by first-time buyers. Darling last week scrapped the tax on purchases worth 250,000 pounds or less.
“Undoubtedly this new measure will be welcome relief for aspiring first-time buyers,” Gahbauer said. “However, based on past experience it may not be enough on its own for the housing market to make a full recovery.”
Prime Minister Gordon Brown must call an election by June. A separate report today will confirm an earlier estimate that the U.K. economy grew 0.3 percent in the fourth quarter, according to the median of 28 forecasts in a Bloomberg News survey. The data will be released at 9:30 a.m. in London.
