House prices in the U.K. rose for the first time in thirteen months in March, supported by strong buyer demand, but the market outlook remained uncertain, a survey by the Nationwide Building Society showed Thursday.
Home prices rose 0.8 percent year-on-year in March after recording negative or zero movement in the past 12 months. Economists had forecast a 0.9 percent increase. The typical U.K. home is now worth GBP 164,630. Nationwide Chief Economist Robert Gardner said that the outlook for the housing market was unusually uncertain, in part because the prospects for the wider economy were unclear, but also as the impact of a number of policy initiatives was hard to gauge.
"In recent months buyer demand has been supported by healthy rates of employment growth, as well as the Funding for Lending Scheme, which has helped to reduce mortgage costs and increase credit availability," Gardner said.
"At the same time housing supply has remained relatively constrained."
Prices remained unchanged on a monthly basis in March compared to expectations for a 0.2 percent increase. This followed a 0.2 percent month-on-month increase in February.
"House prices are likely to be constrained for some time to come by still relatively limited market activity, comparatively low and fragile consumer confidence, muted earnings growth and households' squeezed purchasing power," said Howard Archer, Chief European and UK Economist, at IHS Global Insight.
A survey by Hometrack early this week showed that house prices climbed at the fastest pace in three years in March, led by higher property demand.
Another survey by GfK NOP revealed early today that British consumer confidence has stabilized at historically low levels in March. The report also suggested that consumer mood has climbed out of the very deep trough seen throughout 2012.
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