However there are wide variations across England and Wales where there have been significant price changes.
David Brown, commercial director of LSL Property Services, commented: “Although prices are static, this doesn’t mean real property values are staying still. With RPI currently running at 5.5%, property owners are seeing value being chipped away at an alarming rate.
“This is great news for buyers who are able to secure finance. High inflation won’t last forever and the low rates fuelling inflation also mean it’s possible to secure good value fixed-rate mortgages.
“Buyers should bear in mind that currently, even though wages aren’t keeping pace with inflation, property values represent a smaller and smaller proportion of income.
“The static national figures conceal a much more dynamic picture in the regions, where prices are moving sharply in both directions. London and the South East continue to power forward, while the North of England and Wales have seen significant price falls.
“Lenders are especially worried about the effect government spending cuts will have on unemployment in areas where a large proportion of workers are employed by the state, and this is holding back demand. This disparity may be reduced to a small extent by the government’s FirstBuy scheme, but the scale of regional price variations shows it will take much more than the promised £250 million to invigorate regions where the biggest falls are happening.”
Dr Peter Williams, housing market specialist and chairman of Acadametrics, said: “The average price of a home in England & Wales fell by a tiny -0.1% in March to £222,146 partly reversing the small increase of 0.3% seen in February.
“Over the last twelve months, we have experienced very small changes in the month on month figures, ranging between +0.4% in June and July 2010 and -0.7% in November 2010. These small fluctuations in price over the last twelve months sum in total to zero, so that the annual change in prices from March 2010 to March 2011 is 0.0%, coming back from a negative -0.5% in February.
“There is one special factor that has some impact upon this March release. This is the impact of transactions being brought forward to avoid the new higher threshold for stamp duty on properties sold for £1 million or more.
“The estate agents operating in central London and in its more affluent suburbs have been reporting an increase in activity in this price bracket as purchasers seek to avoid paying the increase in tax. Unfortunately it is too early in the compilation of the monthly statistics for March for us to report hard facts on this phenomenon.
“Although economic and regulatory uncertainty remains very strong there is some evidence to suggest wider housing market conditions are easing a little. The number of higher loan to value products has increased, albeit the volume of lending has not.
“Lenders are now reporting a lack of demand which is probably unsurprising given very low consumer confidence and concerns about the impact of forthcoming expenditure cuts, joblessness and taxation rises. That said, not all buyers are in the same position, and the better spread of products now available does suggest that opportunities exist to move forward on a transaction.
“In a typical year, housing transactions increase in March, over February levels, by around 24%, reflecting the normal ‘spring surge’. This year we estimate that the increase will be closer to 30%. Estate agents have been reporting a pick-up in activity, with those buyers in a position to secure mortgage finance looking to complete a deal before a much anticipated increase in interest rates takes effect.”
