House prices fell by -1.1% in March according to Halifax.
This was only the third monthly decline in the past fifteen months; this is in contrast to the previous fifteen months when there were eight monthly price falls. The monthly movements, however, can be volatile and the three month-on-three month change is a more reliable indicator of the underlying trend.
However, house prices in the latest three months (January 2014-March 2014) were 2.3% higher than in the final quarter of 2013. This is within the range of 1.8% – 2.3% recorded for this measure since June 2013.
Prices in the three months to March were 8.7% higher than in the same three months a year earlier. This continued the upward trend in the annual rate.
HMRC figures show home sales increased for the tenth successive month in February to 108,940; 32% higher than in February 2013. In February there were 70,309 mortgage approvals for house purchases – a leading indicator of completed house sales – 8% lower than in January. However, compared to a year earlier according to the Bank of England approvals were 34% higher.
Lack of supply coming on to the market adding upward pressure on prices. The number of homeowners providing instructions to put their property on the market for sale continues to decline since the end of 2013. Although new buyer enquiries has also fallen since the start of the year the imbalance between housing supply and demand remains. Latest housebuilding figures show signs of improvement with the number of housing starts in England in 2013 rising by 24% to 98,610 from a year earlier. However, the numbers of homes completed fell marginally by 2% to 87,000 during the same period.
Commenting, Stephen Noakes, Mortgages Director, said:
“Although house prices fell in the month, prices in the three months to March were 2.3% higher than in the final quarter of 2013. The annual rate of increase rose with prices in the three months to March 8.7% higher than in the same three months last year.”
“Housing demand continues to be supported by an improving economic outlook, growth in employment, rising consumer confidence and low interest rates.
“The recent strengthening in house price is increasing the amount of equity that many homeowners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply and easing pressure on prices.”