House prices fall for first time in seven months

Nationwide figures reveal 0.1% drop in house prices in April - but figures still higher than 12 months before

House prices fell by 0.1% in April, the first fall in seven months, but they remained higher than they were 12 months previously, according to the UK's biggest building society.

The figures from the Nationwide put the annual price of a UK home at £165,586. This is higher than the £164,630 recorded in March, but the seasonally adjusted figures, designed to smooth out changes driven by seasonal differences in activity in the market, showed a 0.1% fall over the month.

This was the first drop since September, and smallest of four during the last 12 months.

The annual rate of change, which is not seasonally adjusted, showed prices were up by 0.9% on April 2012, while a quarterly comparison showed a 0.5% increase on the previous three months' averagRobert Gardnere.

April's fall followed a flat-lining in prices in March, and reports of a slowdown in the mortgage market at the start of the year.

However, the society's chief economist, Robert Gardner, said there were signs that activity and pricing had gained momentum.

"The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year," said Gardner.

"Similarly, the number of mortgage approvals has edged up from the levels prevailing last year, and there are reasons for optimism that activity levels will continue to strengthen in the months ahead."

The society, which bases its figures on mortgage valuations it has carried out over the month, pointed to the return of first-time buyers to the market in recent months and government schemes to increase the cost and availability of credit as positive signs for the housing market.

It added that there were "tentative signs that wider economic conditions are starting to improve", but noted that "progress is likely to be gradual".

The most recent figures from the Land Registry showed a 0.1% rise in prices in England and Wales in March. However the data, based on completed purchases, showed vast differences between different regions, ranging from double-digit price falls in some cities to double-digit growth in some part of London.


Hilary Osborne

The GuardianTramp

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