DCLG reports 1.1% rise in house prices in April

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by Kay Murchie

The Department of Communities and Local Government (DCLG) has reported today that UK house prices climbed by 1.1% in April.

This means the annual rate of fall has eased to 13% and puts the average UK property at £189,215, according to the DCLG.

The positive news adds to the earlier report today by the Royal Institution of Chartered Surveyors (Rics) who announced that new buyer enquiries rose for the seventh consecutive month in May, while completed sales were at their highest since August 2008.

According to surveyors, continued growing interest from potential buyers, together with fewer homes being put up for sale is stabilising UK house prices.

Meanwhile, the Halifax and Nationwide also recently reported rise in UK house prices during May with gains of 2.6% and 1.2% respectively.

However, many housing commentators point to the fact that current economic conditions could still restrict any recovery in the housing market - particularly rising unemployment.

Last week, Nitesh Patel, Halifax’s housing economist, highlighted that house prices fell 11% during 1991 and 1992, but during this period, there were still five monthly price rises.

This was echoed by Nationwide’s Chief Economist Martin Gahbauer, who said: “During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods.

Meanwhile, commenting on today’s figures, Howard Archer, an analyst at IHS Global Insight, said: “We remain sceptical that house prices have bottomed out. Significantly, it is not uncommon for there to be months of rising prices when house prices are still trending down.”