House price growth non-existent in April: Nationwide

House price growth non-existent in April: Nationwide

	Published : Thu, 27 Apr 2006 10:55 By : Andrew Stead Print this Story

LONDON - House prices showed no movement in April after surging in March, according to the latest report from the Nationwide Building Society. It predicted on Thursday that the house prices could slow down even further over the rest of the year.

Nationwide's report said that the house prices barely increased by 0.1 percent this month after a 1.1 percent jump in March. This sharp fall has also eased the year-on-year rate increase, which fell from 5.3 percent to 4.8 percent. Rising unemployment, surging oil and petrol prices coupled with massive increases in utility bills have stretched the finances of many potential homebuyers. These figures are well below analysts' predictions of 0.4 percent monthly gain and a 5.2 percent year-on-year gain.

Nationwide said that the average house price in the UK was £163,573 in April. "The cooling in prices in April was not unexpected given the surge in March," said Nationwide economist Fionnuala Earley. "However, the underlying picture remains reasonably healthy as demand conditions have remained quite firm."

The group predicted a modest 3 percent growth in the housing market this year. The market was also being hampered by the unavailability of affordable good-quality housing, "Estate agents are reporting some increased levels of supply on their books as new sellers come to market, perhaps encouraged by the recent upturn in prices," Ms Earley said. "But supply is still at a relatively low level and this, coupled with higher house prices choking off some demand, suggests that activity will fall over the coming months."

But petrol prices continue to remain a factor and could considerably weaken consumer confidence for the rest of the year. "All in all we think this adds up to a mildly weakening, rather than accelerating, profile for house price growth for the rest of the year," Earley concluded.