The good news is that in March house prices rose; the bad news is that house prices rose only by 0.7%.

Although for many people, some still trapped in negative equity, that can only be a good sign and what’s more, it reverses February’s dip.

The figures come from the Nationwide with an explanation from their chief economist Martin Gahbauer. He issued the good news, saying that the fall of 0.8% of the price of a typical UK property was mostly reversed by the 0.7% rise in March. The average price of a typical UK property is now £164,519 which is actually 9% higher than a year earlier.

Mr Gahbauer 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. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January’s large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather. With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.”

Furthermore, he points out that the number of houses for sale coming onto the market has not dramatically increased. This means that lower buyer activity trends has not had too negative an effect upon house prices as a whole. Should this state of affairs continue, then prices should hold up, but few properties will change hands.

When considering the impact on the market of the stamp duty holiday, Mr Gahbauer said that the Nationwide believed that the raising of the threshold from £125,000 to £250,000 for strictly first-time buyers, would make an average saving of £1,368.

Mr Gahbauer said:
“For first-time buyers, this initiative effectively represents a larger and longer version of the stamp duty holiday in place between September 2008 and the end of December 2009 for properties bought for less than £175,000. Looking back on the previous tax holiday, the evidence on its success in boosting transactions is mixed. Intuitively, one might expect a stamp duty holiday to boost total house purchase activity, with a disproportionately greater increase in transactions at the lower-priced end of the housing chain.

“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.”

So there you have it; some good news, some bad, but the trend does look to be improving.

Guest Article by Neil Camp

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