Property prices up 5% in March

UK house prices increased by £3,687 to £236,939 in March, a 4.9 per cent increase compared with the 2011 first quarter. The figures, from Rightmove’s house price index, represent the largest first-quarter rise in property prices since 2004, boosting hopes for an continued improvement in the market for the rest of the year.

In London, where interest from overseas buyers has soared, house prices increased by 7.3 per cent compared with the first quarter of 2011, to £455,159. The average asking price in Kensington and Chelsea exceeded £2 million for the first time.

 Rightmove director, Miles Shipside, spoke out against the end of the stamp duty holiday on properties valued between £125,000 and £250,000. The 1% stamp duty on houses in this price range will be imposed again from 24 March. Mr Shipside said: “For a first time buyer it’s already hard enough to raise the necessary deposit and now, as well as potentially losing between £1,250 and £2,500 in stamp duty exemption, asking prices for their target property types have increased by over £5,000 in the last year as well.”

 A recent report by the Building Societies Association suggested that consumer optimism in the housing market is returning. Four out of 10 people surveyed in the 2012 first quarter said they expected house prices to rise during the year, according to the BSA’s Property Tracker study. Optimism is greatest in south east England, where 53 per cent expect property prices to rise.

In contrast, just 30 per cent of those surveyed in Wales, said they expected an increase. Although there was a general mood of optimism, 56 per cent were pessimistic about employment, and said that job insecurity was a barrier to the property market recovering.

Stamp duty was also seen as a barrier to recovery, with 12 per cent of those surveyed saying that stamp duty was a problem, compared with 10 per cent in the final quarter of 2011. Property prices up 5% in March