House prices increased by 2.2% in March following February’s 0.4% fall as prices continue to fluctuate month-to-month Halifax reports.

However, on a quarterly basis, in the three months to March house prices were 0.1% lower than in the previous three months highlighting a relevant stable trend.

With that, the average UK house price in March 2012, at £163,803, was almost identical to that in July 2011 (£163,765). House Prices in the first three months of 2012 were 0.6% lower than in the same period last year. This was the smallest fall in prices on this measure of the annual rate since October 2010 (+1.2%).

There are signs of a pick-up in house sales. The number of completed house sales has risen to its highest levels since late 2009. The number of sales in January and February was a seasonally adjusted 81,000 in both months. This was 14% higher than in the same period last year.

March 2012

That growth in sales reflects the market conditions – as measured by the ratio of house sales to the stock of unsold properties – reported by the RICS’s monthly survey – have tightened slightly in recent months, driven by the increase in sales. This modest improvement in market conditions has probably helped to support house prices.

Also a potential cause for the sales pickup was the rush by first-time buyers seeking to beat the end of the stamp duty holiday.

The proportion of house purchasers who are first-time buyers increased between the final quarter of 2011 and the first quarter of 2012. This suggests that the ending of the temporary increase in the starting threshold of stamp duty for first-time buyers from £125,000 to £250,000 in late March encouraged some to buy before the threshold reverted to the lower level. An extra four in ten first-time buyers – 150,000 in total – have been exempt from paying stamp duty as a result of the Government temporarily doubling the starting threshold over the past two years.

Martin Ellis, Halifax housing economist, said: “House prices in the first quarter of 2012 were little changed compared with the final quarter of 2011, showing a decline of just 0.1%. This was the same as the slight fall recorded between the third and fourth quarters of 2011. The underlying trend therefore indicates broad stability in UK house prices. The more volatile monthly figures continue to fluctuate as a result of the historically low level of sales volumes, increasing by 2.2% in March following February’s 0.4% fall.

“Efforts by first-time buyers to beat the expiry of the stamp duty holiday at the end of March have probably increased sales in recent months and may have helped to support prices.

“We continue to expect little overall movement in prices this year provided that the UK economy does not suffer a pronounced weakening.”