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House price growth stalls

By Lee Wild

Date: Monday 15 Mar 2010

House price growth stalls

The recent recovery in UK house prices appears to have run out of steam as asking prices rose by the smallest amount on record for the month of March.

New sellers are asking for just 0.1% more than they were in February, taking the price of a home to £229,614, according to Rightmove. The average increase at this time of year has been a sturdy 1.3%. They’d spiked 3.2% a month ago.

A big increase in the number of sellers is blamed, with 34% more properties hitting the market than at the same time last year, the most in 18 months, and 17.5% more than in February.

“As usual we’ve seen a winter price lull followed by a New Year bounce, though at a national level it’s never previously fizzled out before spring has really sprung,” said Miles Shipside, commercial director of the property website.

“So in some areas more restrained pricing is required as a direct consequence of buyers having more choice.”

Shipside still expects some further price rises in the first half of this year, although things have become much more unpredictable.

Howard Archer, chief UK economist at IHS Global Insight, is understandably cautious given the prospects for an increase in unemployment and low earnings growth.

“If the increase in the supply of properties for sales persists over the coming months, it will cause a recent major prop of house prices to crumble and increase significantly the likelihood that prices will suffer a significant correction,” he says.

“We expect house prices to be no better than flat over 2010 as a whole and would not be surprised if they recorded an overall drop.”

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