House prices drop again in April: Nationwide
House prices have fallen by a further 0.4 per cent this month, signalling that while the housing measures included in the budget are welcome, they are unlikely to turn things around.
According to the latest figures from Nationwide, the average house price have fallen to £151,861 during April, down from £150,946 in March.
The fall reverses the 0.9 per cent rise seen in March, although it does support Nationwide's earlier claims last month that it was "far too soon to see this as evidence that the trough of the market has been reached".
Overall, annual change in average prices is now -15 per cent. Although this is a marginal improvement on March, when the annual change was -15.7 per cent.
However, the three-month on three-month rate of change, which is generally considered a smoother indicator of the short-term trend in prices, improved to -3.1 per cent in April from -4.1 per cent in March.
Nationwide chief economist Fionnuala Earley said: "The chancellor announced several measures aimed at boosting the housing market in his Budget. The scheme for government guarantees for new, high-quality residential mortgage backed securities are welcome and may help to boost the amount of mortgage credit available.
"However, since the availability of credit is only part of the reason why the housing market is in the doldrums it is unlikely to lead to a swift turnaround in its fortunes.
"Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further.
"Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise."
Earley added that while she welcomed the government's extension of the stamp duty holiday, it was unlikely to result in large numbers of first-time buyers re-entering the market.
"It seems more likely that, for the most part, buyers will remain cautious as long as they think that prices will continue to fall.
"The latest data from Nationwide's Consumer Confidence Survey shows that consumers still think that prices will fall over the next six months. However, there has been a significant moderation in the rate at which they think prices will fall.
"This, along with the recent pick up in buyer enquiries and the increase in house purchase approvals in February, has encouraged some to suggest that this is the turning point in the market.
"While affordability is indeed more favourable and there does seem to be some cautious optimism from some quarters, it is still far too soon to say that this is the start of a solid revival in the market."
