Financial News

Click to enlarge photo

House prices fell by 0.4% during April, the Nationwide Building Society says.

Homes have now lost 15% of their value over the past year with the average value of a UK home at £151,861.

The Land Registry also reported a 0.4% fall in prices for March.

The Nationwide drop is below the new stamp duty threshold everywhere but in London and the outer metropolitan region.

March had seen a surprise rise of 0.9% - the first increase in 16 months.

Nationwide said this month's drop helped improve affordability for struggling buyers while the Chancellor's decision to extend the stamp duty holiday for properties worth less than £175,000 had also benefited house-hunters.

Fionnuala Earley, Nationwide's chief economist, said: "It is possible that the extended period of the higher threshold will be more of an incentive for first-time buyers to enter the market now that affordability has improved due to falling interest rates and house prices.

"But it seems more likely that, for the most part, buyers will remain cautious as long as they think that prices will continue to fall."

Last month's shock rise in prices was the first in a series of positive new stories about the market.

The Council of Mortgage Lenders said lending rose by 16% during March, and HM Revenue and Customs publishing figures showing that the number of homes changing hands soared by 40%.

Property intelligence group Hometrack recently released figures showing that house prices fell at their slowest rate for more than a year during April.

Consumer confidence this month is also improving.

But the British Bankers Association said the number of mortgages approved for house purchase fell for the first time in four months, slumping by 7% in March.

Economists say signs of a green shoots in the housing market may be tempered by rising unemployment and lack of credit for mortgages.