Nationwide has reported a rise in house prices by 0.9pc during April - reversing the 0.6pc fall recorded during March.

The monthly Nationwide House Price Index however is light on more good news for home sellers. During April, the annual rate of house price inflation fell to 7% from 7.9% and the building society described the market as “broadly flat”.

Despite the rise in prices, Nationwide is viewing their latest figures as signs the market is cooling.

Interest Rate rise unlikely
Nationwide did say that another quarter point rise in base interest rates, currently at 4.75 percent, looked less likely but that such a move would not likely jeopardise the gradual cooling pattern in house prices.

For election spotters, there was also news that house prices are highest in Conservative held areas, but, have grown most in cash terms in Liberal Democrat held areas since the last election. Among the three main parties, prices are lowest in Labour areas with an average of £179,000, with Liberal Democrat areas averaging £205,000.

Commenting on the figures Fionnuala Earley, Nationwide’s Group Economist, said:
“The price of the typical house increased by a seasonally adjusted 0.9% in April. This followed a fall of 0.6% in March, but continues the overall trend of a broadly flat path of price rises since the end of last year. The price of the typical property increased by £2,252 in April and now stands at £156,128.

Volatility in monthly house price changes is not unusual in the spring. Given the early Easter we believe that the traditional house hunting season may have moved forward slightly this year. The trend, however, continues to confirm our view of a gentle slowing in the market. Monthly house price inflation over the last three months has averaged 0.3% compared with 2% per month over the same three month period a year earlier. The annual rate of house price growth also continued to slow in April, falling to 7% compared to 7.9% in March.

The latest figures seem to confirm our view that housing market activity, which slowed throughout the second half of last year, has now bottomed out. Estate agents have seen an increase in unsold stocks on their books as sellers have been reluctant to drop prices. As sellers become more realistic about the path of price movements and buyers see a continuing flat trend in house price growth, we expect to see house purchase approvals increasing to around 92,000 in April. It is important however to put this return of buyers to the market in context. This level of activity, while increasing slightly on recent months, remains low and is comparable to that in 2000. It is substantially below the peak of 132,000 cases per month reached at the end of 2003.”

Reprosessions
More signs of a cooling in the market came on Wednesday 27th April, when The Department of Constitutional Affairs revealed that lenders entered 25,869 proceedings in county courts in England and Wales in the first quarter, to repossess mortgaged property.

That was up more than 35 percent on the same period a year ago and the highest since comparable records began in the mid-1990s.

Actual repossession orders rose an annual 25 percent to 14,048, the highest since the second quarter of 2000.

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