House prices drop by 1.1% in March

House prices dropped slightly in March but it is expected that this trend will be reversed for the rest of 2014 and house prices continue to rise. House prices are still on target this year to match price increases not seen since 2007. The market is on an upward trajectory and and the 1.1% drop in March will be a blip probably caused by the bad weather and the floods in the earlier part of the year. House prices are 2.3% higher so far this year which now means the average house price stands at £178,000. According to the Halifax house price index house prices are on target for an increase of 8.5%.

Nationwide: London house prices up 18%

Nationwide grabbed the headlines earlier in the week with the latest data for house price increases in London. Prices were an eye watering 18% higher that 12 months ago. There is already concern in Whitehall that there is a bubble developing in London but this has been dismissed by the government who have said that the London market has been driven by cash rich buyers from overseas. House prices have been boosted as the worlds richest people see London as a safe haven to park their money. The tax laws also make the UK a very attractive place to bring their cash and this is thought to have had an impact on prices.

Many will argue that it is still too soon to say whether or not we are in the grip of a property bubble particularly if the froth is coming off of the market as March’s figures suggest. The Bank of England said that there had been a slowdown in mortgage approvals in February. It is also thought that the market will also be affected by the ability of borrowers to take out a loan as wahes have nowhere near kept up with house prices.