London - Arabstoday
Prices fell year-on-year by 0.9pc in March, the first annual drop in six months, to reach £162,712 on average, according to the Nationwide report. It predicted that prices will head sideways or downwards over the coming year as the weak economy acts as a continuing \"drag\". Estate agents and lenders had reported a surge in first-time buyer interest in recent months as the stamp duty deadline approached, but fears were raised that this would be followed by a dip once the 1pc duty for first-time buyers on properties worth between £125,000 and £250,000 was reinstated. Around four in 10 first-time buyers have benefited from the concession during the two-year period, according to recent research. Nationwide said it was difficult to estimate how much the policy had boosted the market, as it is not known how many sales would have otherwise taken place. But the report said: \"Nevertheless, the reintroduction of stamp duty is likely to pose a further headwind to housing market activity in an already challenging environment. Based on our estimates, around 65pc of first-time buyers will pay stamp duty in the coming fiscal year, generating nearly £600m of tax revenue. \"In 2012-13, we estimate that around 100,000 first-time buyers will pay stamp duty on properties between £125,000 and £250,000, adding an average of around £1,800 to purchase costs relative to the last fiscal year.\" Nationwide said the 7pc stamp duty rate imposed on £2m homes in the recent Budget was also likely to have an effect on the market \"albeit a modest one\". London estate agents have already been reporting some sales grinding to a halt as a result of the announcement. The Government recently launched the NewBuy scheme, to give first-time buyers and home movers a helping hand by enabling them to buy new-build properties with just a 5pc or 10pc deposit, rather than the 20pc typically demanded. Nationwide\'s chief economist Robert Gardner said: \"This dampening effect on housing market activity and prices may fade over the course of the summer, especially if the wider economic outlook begins to improve and other policy measures such as the Government\'s NewBuy scheme are successful in supporting buyer demand. \"However, in our view the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower in the next 12 months.\" Nationwide also released figures for the first quarter of this year, showing that seven out of the 13 UK regions recorded year-on-year price growth. The North saw the strongest growth in the first three months of this year, with a 0.6pc rise taking the average house price to £114,828. Wales saw the biggest drop, with a 3.1pc dip dragging typical prices to £129,682. Meanwhile London, which recorded the strongest year-on-year price rise at 2.3pc, saw a 0.7pc dip in house prices over the quarter, taking average prices to £293,375. The report said that hopefully the NewBuy scheme, along with other measures such as simplifying the planning system, would help boost the housing supply. It said that current rates of building activity are below what is needed to meet future demand as the number of new households increases.