Surprise bounce to March house prices

Published ¤ 02/04/2009

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  • House prices increased by 0.9% in March
  • House purchase activity reaches highest level since May 2008
  • Welcome signals of market improvement but too early to talk of house price recovery
  • Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:
    "Spring brought a surprise bounce to house prices in March. The price of a typical house increased for the first time since October 2007, rising by 0.9% during the month and reducing the annual rate of fall from -17.6% to -15.7%. This brings the price of a typical house to £150,946. The moderation in the annual rate of fall is somewhat distorted by conditions last year and so it would be unwise to draw strong conclusions from the significant slowdown in the annual rate of fall. Equally, while the rise in prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has been reached. The Bank of England has already taken strong measures to ease the tensions in economic and financial markets by cutting rates and commencing quantitative easing. However it will take time for these to work through into the housing market before we can expect a sustained recovery in house prices."
    Paul Skinner of PKS said: "Although on the face of it, this looks like the first shoots of a recovery, we should still be cautious."
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