Little quarterly movement in house prices

House prices in the three months to March were 0.1% lower than in the previous three months, the Halifax has reported.

This was the same as the decline in prices on this measure of the underlying trend in December 2011 (-0.1%).

On a monthly basis, house prices increased by 2.2% in March. This followed February’s 0.4% fall as prices continue to fluctuate month-to-month as transactions levels remain historically low.

Prices in the first three months of 2012 were 0.6% lower than in the same period last year. This was the smallest fall in prices on this measure of the annual rate since October 2010 (+1.2%).

The average UK house price is at the same level as in July 2011. The UK average price in March 2012, at £163,803, was almost identical to that in July 2011 (£163,765).

The number of completed house sales has risen to its highest levels since late 2009. The number of sales in January and February was a seasonally adjusted 81,000 in both months. This was 14% higher than in the same period last year. (Source: HMRC)

Market conditions, as measured by the ratio of house sales to the stock of unsold properties – reported by the RICS’s monthly survey – have tightened slightly in recent months, driven by the increase in sales. This modest improvement in market conditions has probably helped to support house prices.

The recent increase in sales may have been driven by first-time buyers seeking to beat the end of the stamp duty holiday. The proportion of house purchasers who are first-time buyers increased between the final quarter of 2011 and the first quarter of 2012. The Halifax said this suggests that the ending of the temporary increase in the starting threshold of stamp duty for first-time buyers from £125,000 to £250,000 in late March encouraged some to buy before the threshold reverted to the lower level. An extra four in 10 first-time buyers – 150,000 in total – have been exempt from paying stamp duty as a result of the Government temporarily doubling the starting threshold over the past two years.

Martin Ellis, the Halifax’s housing economist, said: “House prices in the first quarter of 2012 were little changed compared with the final quarter of 2011