House prices dip 1%, says Nationwide
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House prices fell by 1 per cent in February, the latest Nationwide monthly house price index reveals.
The average house price fell by a seasonally adjusted 1 per cent month-on-month in February to £161,320, ending a strong run of nine consecutive monthly increases.
Nationwide says the price decline could be a result of snowy weather and the expiry of the stamp duty holiday. It says it is too early to say whether February’s drop is start of a new trend.
Nationwide chief economist Martin Gahbauer says: “There is evidence from a range of indicators that the market may have lost momentum in early 2010 as the stamp duty holiday ended and house hunters were obstructed by the icy weather.
“Judging from the fall in retail sales during January, however, the housing market does not appear to be the only sector of the economy to have experienced a setback related to adverse weather and the expiry of economic stimulus measures.
But Gahbauer adds: “At this stage, it is difficult to gauge how much of the drop in housing activity is attributable to one-off factors and therefore whether February’s fall in prices is just a temporary blip or the start of a new trend.”
Carter Jonas senior partner and property consultancy David Smith says: “We shouldn’t be deflated by February’s figures. Although seasonal factors, the end of the stamp duty holiday and the weather doubtless played a role in February’s dip, prices, at the macro level, were becoming disconnected from the broader economy.
“In the long term, a minor correction to the recent trend of price growth will bring greater stability to the market.”
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