House prices drop 0.5pc

Yuan Phoon

May 4, 2012

House prices took a -2.4% hit since the previous month, more than offsetting the 2.2% gain in house price made in March.

Figures from HM Revenue & Customs showed that the total number of completed house sales in the first three months of 2012 was 11% higher than in the same period last year. Sales were also the highest in the first quarter of any year since 2008.

Halifax said that the efforts by first-time buyers to beat the expiry of the stamp duty holiday at the end of March probably increased sales in the first quarter of 2012, making it difficult to determine the underlying trend.

Stamp duty: When something so wrong feels so right

Martin Ellis, housing economist at Halifax, said: “Despite the slight improvement in the underlying trend in recent months, house prices continue to lack real direction with the current UK average price little different to where it was at the end of 2011.

“The ending of the stamp duty holiday for first-time buyers in late March appears to have boosted home sales early this year as buyers strove to beat the deadline and has probably contributed to the volatility in house prices in the past few months.

“We continue to expect little overall movement in prices as the UK economic situation remains challenging.”

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