Property values rose by 1.6% annually, taking the average UK house price to £261,142, according to Nationwide Building Society
The average UK house price dropped by 0.2% month on month in March, although there are signs that activity is picking up, finds a report.
Property values rose by 1.6% annually, taking the average UK house price to £261,142, according to Nationwide Building Society.
Robert Gardner, Nationwide’s chief economist, said: Activity has picked up from the weak levels prevailing towards the end of 2023 but stays comparatively subdued by historic standards. For instance, the number of mortgages approved for house purchase in January was nearly 15% below pre-pandemic levels.
This largely reflects the effect of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic, he added.
Gardner pointed to signs that consumer sentiment is improving. Indeed, surveyors report a rise in new buyer inquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, although gradually.
If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the direction of interest rates, he said.
The index also included data for the UK’s nations and regions, showing annual changes during the three months to March.
The figures showed that within England there was a split, with house prices generally rising in northern regions and dropping in the South. Across northern England (including the North East, North West, Yorkshire and the Humber, East Midlands and West Midlands), prices were 1.7% higher year on year.
Meanwhile, southern England (including the South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 0.3% year-on-year drop, he added. London remained the best-performing southern region, with annual price growth rising to 1.6%. The South West was the weakest performing region, with prices down 1.7% year on year.
He said Northern Ireland remained the best-performing area, with prices 4.6% higher compared with the first quarter of 2023.
