Prices are 8.7% above their April 2009 trough; an increase in the average price of £13,539 over this period. This rise follows a fall between August 2007 and April 2009 of 23%. The average house price is now £168,202; 16% below its August 2007 peak.
The imbalance between supply and demand is easing as the improvement in house prices since spring 2009 has encouraged more people to try to sell their property. New sales instructions increased again in March, helping to push up the stock of unsold properties to the highest since April 2009. The ratio of completed sales to stock fell for the fourth successive month in March – to the lowest since July 2009 – indicating a loosening in market conditions. (Source: RICS monthly survey, March 2010.)
Housing market activity has weakened. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – in 2010 Quarter 1 were 18% lower than in 2009 Quarter 4. Approvals increased by a seasonally adjusted 4% between February and March, but this rise followed falls in both January and February.
The return of the lowest stamp duty threshold to £125,000 at the start of the year and bad weather in January and February have affected the overall level of activity, including approvals, in late 2009 and early 2010.
Commenting, Martin Ellis, housing economist, said:
“The underlying rate of house price growth has slowed in recent months following the relatively sharp rebound, albeit from a low base, in the second half of 2009.
“Our view is that house prices will be flat during 2010 as a whole.”