British house prices rose by 1.6 per cent in March compared with a year earlier, the fastest rise since December 2022 although a smaller increase than economists had been expecting, figures from mortgage lender Nationwide showed on Tuesday (Apr 2).

Prices fell by 0.2 per cent in March alone, the first drop since December 2023 after a 0.7 per cent increase the month before, bucking economists’ expectations in a Reuters poll for a 0.3 per cent rise.

“Activity has picked up from the weak levels prevailing towards the end of 2023 but remain relatively subdued by historic standards,” Nationwide economist Robert Gardner said. Mortgage approvals in January had been 15 per cent lower than before the Covid-19 pandemic, reflecting the impact of higher interest rates, he added.

The Bank of England increased its main interest rate to 5.25 per cent, its highest in more than 15 years, in August 2023. Financial markets see a first cut in June or August, with rates forecast to drop to around 4.5 per cent by the end of the year.

Across the first quarter as a whole, house prices were 1.1 per cent higher than the previous quarter, the fastest three-month rise since the three months to July 2022, Nationwide said. REUTERS