House prices rose by a robust 1.1% in March according to the Nationwide?s latest report. The figures show that the rate of house price inflation jumped from 3.7% in February to 5.3% in March ? a ten month high. ?House price growth bounced back strongly in March after a brief pause in February,? said Fionnuala Earley of the Nationwide.
As yet there is no regional breakdown of house price movements in the first quarter – the regional figures are likely to be released next week. But property experts predict that the recovery in prices is concentrated in London and parts of the South East, with the rest of the country seeing only moderate price rises.
The Nationwide believes that a further acceleration of house price inflation could be witnessed over the coming months. ?There were 115,000 house purchase approvals in February, well above the 10 year monthly average of 100,000,? Mr Earley commented, ?Activity this strong has not been seen since the late Spring/early summer of 2004 when annual house price growth was almost 20%?.
However, mortgage approvals data, released yesterday, showed the first drop since late 2004 and there have been reports from agents of moderating levels of new buyer enquiries. These activity indicators, according to the Nationwide, could be a sign that affordability constraints are beginning to be felt and that the upturn in the housing market might run out of steam.