Nationwide house price index reports rise in March
UK house prices have risen for a second consecutive month, according to the latest house price index for March conducted by Nationwide.
The rise of 0.5 per cent in the average price of a house in the UK has surprised economists who forecasted a fall of 0.1 per cent from February. The measure for February was also revised upwards from an increase of 0.3 per cent to an increase of 0.7 per cent.
The consecutive increases means that the annual rate of house inflation has moved back into positive territory, albeit by just 0.1 per cent. The three month on three month measure rose by 0.6 per cent, its highest level since July 2010.
The news is surprising because most economists expected to see house prices fall due to low levels of consumer confidence and concerns over the impending public sector spending cuts.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
"With the economic recovery expected to remain sluggish, the most likely outcome is that the property market will follow suit, with low transaction levels and prices moving sideways or modestly lower through 2011."
Howard Archer, Chief UK & European Economist for HIS Global Insight noted: “We suspect that renewed modest falls in house prices are more probable than not over the coming months as tighter fiscal policy and likely gradually rising interest rates add to the pressure on the housing market.”
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