House Price Rise in April

House prices rose by 1 per cent in April, according to Nationwide, taking the annual rise to 10.7 per cent — the first time it has reached double digits since June 2007. The average cost of a home in the UK is now £167,802, compared with £184,070 in June 2007. However, the pace has slowed in the past three months and the building society expects sellers to start outnumbering buyers, pushing down prices, as the year goes on.

Martin Gahbauer, Nationwide’s chief economist, said: “While the recovery in new buyer inquiries at estate agent offices appears to have petered out, the past few months have seen an increase in the level of new instructions from sellers. This should lead to a gradual flattening out of the recent upward price momentum.”

The Land Registry reported a 0.6 per cent fall in the average house price from February to March. The Land Registry figures, which are a lagging indicator of prices based on completed transactions, show that the average house price in March stood at £164,288. However, the figure could show a rise in April. A 38 per cent rise in the average number of monthly sales in the three months to January, compared with the same period last year, showed improved sentiment among homeowners.

Mortgage approvals in March also improved, the Bank of England said, increasing to 48,901, up from 46,882 in February. The figure is 17 per cent higher than in March last year, but the Bank’s figures still suggest that mortgage lending has had a sluggish start to the year. Approvals in the first three months were the lowest on record for the first quarter of any year, apart from 2009.

Lenders are also still demanding average deposits of 25 per cent from borrowers, while banks have warned that mortgage rationing may worsen next year when some of them are forced to repay the emergency government loans they accepted in 2008.

House prices may have regained some of their value, but the surveyors who valued them may still be in for a fall. Legal actions against estate agents and surveyors reached record levels last year, with 25 High Court cases alleging professional negligence over property valuations, according to Reynolds Porter Chamberlain, the law firm, compared with only one case in the previous five years. This comes after banks began to threaten surveyors with legal action for overvaluing properties before repossessing them and then selling them for a lower sum.