HOWZAT

Nationwide noted that house prices had risen by 0.4 per cent in March, compared with a 0.6 per cent rise in February and a 0.3 per cent rise in January.

That string of relatively modest increases meant that prices were up by 2.1 per cent in the three months to March, the weakest such pace since August.

The year-on-year rate remained healthy, at 9.3 per cent, but that was down from 10.2 per cent in the year to February.

In recent months, however, indices published by Nationwide and Halifax have diverged, causing uncertainty about the impact that the Bank’s rate rises have had.

Halifax data show that average prices rose by 1.8 per cent last month, the sixth gain of more than 1 per cent in the past seven months.

The Royal Institution of Chartered Surveyors believes that house-price inflation has slowed to its weakest pace since last May.

However, data from the Council of Mortgage Lenders showed the strongest mortgage borrowing last month for any February on record.

Figures from the Land Registry, released yesterday, did little to dispel the uncertainty.

They showed that prices rose by 1 per cent last month, compared with 1.2 per cent in January.

The three-month-on-three-month rate fell, but the annual rate rose.

Howard Archer, UK economist for Global Insight, said yesterday: “There are growing signs in the latest mortgage data and survey evidence ... that housing market activity has peaked, and it seems that the cumulative 75 basis-point increase in interest rates enacted so far since last August is gradually feeding through to weigh down on potential house buyers in conjunction with elevated house prices.

“Nevertheless, housing market activity is currently still relatively high, while an acute shortage of properties means that pricing power is still largely in favour of the vendor in many areas.”

Mervyn King, the Governor of the Bank of England, said this week that there were now “some signs that the housing market is beginning to slow”.

Nationwide said that the price of a typical property in the UK stands at £177,083, up by about £15,000 from a year ago.

Fionnuala Earley, the building society’s chief economist, forecast that prices would rise by between 5 per cent and 8 per cent this year.

She said that insufficient numbers of homeowners were putting their properties on the market and that levels of housebuilding were falling short of demand.

About 200,000 houses are built in England each year, but government figures show that the number of households projected to be formed each year is 223,000.

“With higher immigration assumptions, the annual projection increases to 255,000 per year, making a shortfall of 55,000,” she said.

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