House prices rise in March, says Nationwide

House prices rose by 0.7% in March, Nationwide said this morning, reversing the 0.8% drop in February. It means that average house prices are around 9% higher than this time a year ago.

Nationwide also calculates that with the new Stamp Duty break for first-time buyers, announced in the Budget, average savings will be £1,368. But the lender warned that this might not be enough to get the market moving again.

Martin Gahbauer, Nationwide's chief economist, said: "We do not know what the housing market would have looked like without last year's Stamp Duty holiday, and it may well be that the level of transactions would have stayed even lower for longer. Undoubtedly, this new measure will be welcome relief for aspiring first-time buyers. However, based on past experience, it may not be enough on its own for the housing market to make a full recovery."

He added: "The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales.  Preliminary figures show that the number of loans taken out for house purchases failed to recover from January's large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather. 

"With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.  At the same time, the number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative.  If this trend continues, we are likely to see relatively few properties changing hands, but with prices fairly stable."

David Smith, senior partner at Carter Jonas estate agents, said: "Over the past month, buyer inquiries have fallen and stock levels have risen, and so next month, we may well see another fall in house prices, once again reinforcing the volatility of the market at present."