Average house prices in the UK were essentially unchanged in the first quarter of 2012 after allowing for usual seasonal effects but the annual rate of change has fallen for the first time in six months.
The March monthly and quarterly reports from the Nationwide Building Society show that the price typical UK residential property fell by 1% in March and prices are now averaging £163,327, some 0.9% lower than a year ago.
The annual rate of change moderated from 1.1% to 0.2% and means that the year on year rate of house price growth is now in negative territory for the first time in six months.
On a quarterly basis just over half of the 13 UK regions recorded annual price growth in the first quarter of 2012. The North saw the strongest quarterly growth rate, with prices up 0.6%. This pushed the annual rate of price change up from -1% to 0.8%.
House prices increased by 0.5% in Scotland during the quarter, which resulted in a slight improvement in the annual rate of change from -0.8% to -0.2%. Dundee and Angus was the best performing area, with prices up 1% year on year. Perthshire and Stirling was the weakest performing area.
Wales was the worst performing region on a quarterly basis, with a seasonally adjusted 3.1% fall. Consequently, the annual rate of change fell from 1.5% to -2.9%, making Wales the second weakest region on an annual basis, behind Northern Ireland.
Cardiff, the most expensive area in Wales, was also the strongest performing over the year. Mid and West Wales, which comprises Carmarthenshire, Ceredigion, Pembrokeshire and Powys, is the least expensive part of Wales and continued to see prices fall over the past twelve months.
On an annual basis, prices were down 2.9% compared with the first quarter of 2011. Northern Ireland recorded a third consecutive quarter of price declines and average prices were down 8.6% year on year.
London remains the top spot in terms of annual price growth but even here annual house price growth moderated to 2.3% from 5.4% in the fourth quarter of 2011. Hackney saw the strongest growth, with prices up 12% compared with last year. Brent was the weakest performing borough, with a 1% fall in average prices.
The Nationwide says that a north/south divide continues to persist, with annual price growth in southern England, that is the South West, Outer South East, Outer Metropolitan, London and East Anglia, outpacing that of northern England, that is the West Midlands, East Midlands, Yorkshire and Humberside, the North West and the North, for the twelfth consecutive quarter.
Amongst England’s major towns and cities, Cambridge has seen the strongest price growth over the last twelve months, with prices up 13%. Carlisle remained the worst performing city with prices falling 5% over the same period.
‘A slowdown was to be expected, given the imminent expiry of the stamp duty holiday, which had provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year,’ said Robert Gardner, Nationwide’s chief economist.
‘This dampening effect on housing market activity and prices may fade over the course of the summer, especially if the wider economic outlook begins to improve and other policy measures, such as the Government’s NewBuy scheme are successful in supporting buyer demand,’ he explained.
‘However, in our view the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next twelve months,’ he added.