Spring bounce lower for house prices

House prices picked up in March, but not as much as they did last year, new government figures reveal.

Data from the department for Communities and Local Government (CLG) shows annual house prices rose 1.1 per cent - or £2,334 - between February and March, but this was far lower than last year's price rise for the corresponding months.

This means annual house price growth fell from 11.8 per cent in February to 10.9 per cent in March. The average UK house was worth £208,890 in March, the CLG figures show.

And this pattern of gently softening of house price growth is something experts predict will continue.

"We suspect that house prices will only gradually lose buoyancy over the coming months," said Howard Archer - chief economist at the Global Insight consultancy.

"An ongoing shortage of properties in many areas means that pricing power is currently still significantly in favour of the vendor and this seems likely to limit the slowdown in house prices over the coming months.

"This is particularly true in London and the south-east, where prices are being fuelled by elevated City bonuses and strong foreign demand, as well as an acute shortage of supply."

The CLG figures show London has the fastest-rising house prices, where property values are 13.9 per cent higher than 12 months ago, followed by the south-east (ten per cent up) and the south-west (9.3 per cent up).

House prices in the east of England rose next highest at 9.1 per cent, followed by prices in the north-west (8.4 per cent), the north-east (7.9 per cent) and Yorkshire and the Humber (7.8 per cent).

House prices in the west and East Midlands rose the least at 7.1 per cent and seven per cent respectively.