House prices rise but double dip fears persist

HOUSE prices managed to rise 0.7 per cent in March on the previous month, mortgage lender Nationwide reported yesterday. However, the gain did little to dispel fears of a double-dip in the housing market as buyers exercise caution ahead of the election.

Martin Gahbauer, chief economist at Nationwide, said: “The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales.”

Gahbauer also questioned the effectiveness of the government’s stamp duty holiday for first-time buyers on properties up to a value of £250,000.

He said: “Undoubtedly this new measure will be welcome relief for aspiring first-time buyers.
However, based on past experience it may not be enough on its own for the housing market to make a full recovery.”

Capital Economics’ Ed Stansfield said: “With mortgage lending subdued in February and the labour market still weakening, we think that the slowdown in the pace of house price growth will turn into renewed falls.”