House prices rise 1.1% as market balances out

Published 09th Apr 2010

House prices rose by 1.1 per cent in March, as distortions to the housing market caused by the bad weather and the change in the stamp duty threshold in January began to even out.

Halifax, owned by Lloyds Banking Group, said that the average UK house price was now 9.1 per cent higher than the low point reached last April, and 5.2 per cent above March last year.

The month-on-month rise in March follows a fall in February of 1.6 per cent and takes the average house price to £168,521.

After a decline of 23 per cent between August 2007 and April 2009, house prices rose steadily in the second half of last year, helped by a drop in supply and a rise in demand. However, the end to the stamp duty holiday on January 1 — which had raised the threshold at which 1 per cent stamp duty was paid from £125,000 to £175,000 — caused a drop in demand at the beginning of the year.

Martin Ellis, a housing economist at Halifax, said: “There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices.”

Halifax said housing market activity had also improved, with the number of sales increasing for the last three quarters.

Commenting on the new stamp duty threshold of £250,000 introduced by Alistair Darling in the Budget last month, Mr Ellis said that it meant most first-time buyers would not have to pay the tax.

He added that the southern regions of England would benefit most from the increased limit, removing around three quarters of first-time buyers in Greater London and the South East from the stamp duty net.

Source: ' Times '

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