The Inside Edge
The Nationwide have claimed that house prices in March have fallen by just 1% from the figures declared in February and the drop is in keeping with predictions that suggest sideways or slight downwards movement for the remainder of 2012.
While a 1% fall may not seem particularly excessive, this is the first time for six months that figures have dropped on a year by year comparison and that may be seen as significant in some quarters. It also represents the largest fall recorded by the Nationwide for two years.
At present, the Society claims that the average price of a property in the UK is now £163,327 and that equates to a fall of 0.9% from March 2011.
Nationwide’s Chief Economist Robert Gardner went on to suggest that the outlook was likely to remain the same for the next year at least.
“In our view the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next twelve months,” Mr Gardner said.
The Stamp Duty holiday which drew to a close on the 24th of March 2012 is largely being blamed for the slowdown in March and with buyers now having to pay the 1% tax for properties priced between £125,000 and £250,000, this is expected to have a significant impact on figures due for release at the end of April.
However, Robert Gardner went on to suggest that if the Government’s NewBuy scheme were to have an effect and if there were any signs of improvement in the economy, this pattern could yet change.
“This dampening effect on housing market activity and prices may fade over the course of the summer, especially if the wider economic outlook begins to improve and other policy measures, such as the government’s NewBuy scheme, are successful in supporting buyer demand,” he added.
Nationwide conceded that it was somewhat difficult to read the market as it is impossible to tell how many property sales would have taken place if the Stamp Duty window had not been open at the start of the year. Therefore, a clearer picture can only occur over the course of the next few months.
In addition, we have seen Nationwide producing conflicting sets of figures to the Halifax in recent months and the latter’s statistics for March 2012 are still to come.
Overall therefore, it’s a mixed and sometimes confusing picture but with the Stamp Duty holiday finally at an end, figures should finally begin to settle down and give us a more accurate indication.