House prices fell by 0.3 per cent in March, according to the latest Nationwide house price index, the first drop in prices for two years.
The average property price in March was £207,308, a monthly drop of 0.3 per cent, following a 0.6 per cent rise in February.
Prices rose on an annual basis, however, growing by 3.5 per cent in the year to March.
Legal & General Mortgage Club director Jeremy Duncombe says: “Today’s slight dip in Nationwide’s monthly house price index is no cause for panic. Indeed, instead of focusing on monthly fluctuations, we should concentrate on the growing gap between supply and demand.
“A lack of affordable homes, stamp duty and planning challenges are the big three factors that are hindering our housing market. The housing market would benefit from a relaxation on stamp duty, which is stifling transaction flow and a review of the current archaic approach to building on green belt land.”
Mortgage Advice Bureau head of lending Brian Murphy says: “Values cooling by less than half a percent month on month and annual growth remaining steady – particularly compared to March 2016 which was exceptionally busy, as has been noted by other industry sources previously – could perhaps suggest that the market is flattening.
“In itself, this wouldn’t perhaps be a negative trend, as a slowing down of prices coupled with the ongoing near record low mortgage rates available may provide a welcome opportunity for those who want to get onto or move up the property ladder to take advantage of the current climate.
“Given that the Nationwide report includes data from DCLG showing that home ownership levels are at their lowest since the mid-eighties, then any market conditions which may assist more people to buy their own property could be seen as a positive development, rather than a cause for concern.”