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The first rise in house prices since 2007 has been met with muted reactions after the price of the average home rose 0.9% last month compared with a 1.9% decrease in February.
The shift in property values takes the average house price in Britain to £150,946.
Nationwide Building Society were quick to down play the significance of rising house values, saying there was not enough evidence to show that the market had bottomed out.
Economist Howard Archer at HIS Global Insight said, “Housing market activity remains extremely low and any pick up in activity over the coming months is likely to be gradual and fitful.” He went on to say that he fully expects property prices to fall by another 12% in 2009 due to the ever-increasing unemployment problem. “House values could drop 5% in the first half of 2010, taking the total slide from the peak in October 2007 to 31%”, he added.
On the subject of interest rates and quantitative easing, Nationwide’s chief economist Fionnuala Earley believes it will take time before we see the benefits of such measures filtering into the housing market.
News of rising house prices came hot on the heels of figures showing a rise in mortgage approvals – the highest level since May last year. Home loan approvals for the month rose to 37,900, above the average 32,000 per month in the second half of 2008. While encouraging, this level remains “far below” Nationwide’s average.
Meanwhile, Halifax was quick to dismiss January’s rise in house values as just a blip. Joining economists and rival mortgage lenders in the belief that more evidence of a recovery is still to be seen.
