Home prices in the U.K. surged to hit a three-year high in March 2013. The hike is driven by London that witnessed a price rise of 0.7 percent. However, buying confidence remained stagnant since January, 2013.
According to the figures released by Nationwide Building Society, home prices were up 0.8 percent from the figures of 2012 and around 0.3 percent from that of 2010. Home prices in England and Wales rose 0.3 percent.
In another report, Hometrack stated that seven of the ten regions assessed by the firm had posted a price increase in March. Two of the regions showed no change at all, while a north-eastern region posted a slight slump of 0.1 percent.
Average property prices in London went up by 2.8 percent between January and March 2013. Prices are 4.6 percent higher than those of the first quarter of 2012. Average prices also increased 0.8 percent in Swindon for the first time since Feb 2012. Prices were up 15 percent in Camden and 10 percent each, in the areas of Newham, Fullham and Hammersmith.
The commendable rise in home prices can be attributed to the government's constant efforts of reviving the housing sector. The bank of England's "Funding for Lending" plan and Nationwide's "Save to Buy" strategy are some such schemes that have encouraged home buying activities in the region.
However, Nationwide's monthly home price index hardly recorded any changes when compared to the figures of February 2013. Experts believe that the stagnation must have occurred due to the shortage of home supply.
"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. At the same time, housing supply has remained relatively constrained," Robert Gardner, Chief Economist at Nationwide, said in a statement.
The overall buying confidence index in the U.K. has remained unchanged throughout 2013. Analysts have expressed that economic uncertainty is leaving the housing scenario in doubt as well.
"The outlook for the market is unusually uncertain, in part because the prospects for the wider economy are unclear, but also as the impact of a number of policy initiatives is hard to gauge," Gardner added.
