House prices stop falling

House prices stopped falling in April for the first time in nine months, according to the latest data from housing information company Hometrack.

House prices were unchanged over the month, following price falls of 0.2% and 0.1% in February and March respectively, with the number of buyers registering with agents having increased 22% in the first four months of the year.

However the firm said the market should expected a return to price falls in the second half of the year, as the impacts of an increase in supply and a renewed fall-off in demand are felt. So far this year rising demand has allowed price falls in the UK regions to be offset by price rises in the capital.

Hometrack found that the average time of a property on the market and the number of areas suffering price decreases all fell in April. But the firm found: “The increase in demand for housing is unlikely to be sustained over the rest of the year as consumer confidence weakens and household incomes remain under pressure. Together with rising supply this will put house prices under renewed downward pressure.”

Richard Donnell, director of research at Hometrack, said: “The second half of 2011 is likely to emerge as a new phase where rising supply will constrain any further improvement in pricing levels. Weaker consumer confidence could also result in a slowdown in demand which would exacerbate the pressure on prices.”