House prices take a plunge for the first time in seven months

Falling houses

House prices in the UK fell marginally in April – the first time prices have fallen since September 2012, according to Nationwide's latest house price index.

The 0.1% monthly drop takes the average price of a home in the country to £165,586, while the annual change now stands at 0.9% for the 12 months to April.

Robert Gardner, Nationwide's chief economist, said there was some evidence that housing market activity and prices have "gained momentum" in recent months, boosted by increased first-time buyer activity, a healthier economy and government initiatives such as the Funding for Lending scheme.

He added: "The three month on three month measure of house prices, which is a smoother measure of the underlying trend, has been in positive territory since October last year. The annual rate of house price growth also remained in positive territory.

"Similarly, the number of mortgage approvals has edged up from the levels prevailing last year and there are reasons for optimism that activity levels will continue to strengthen in the months ahead."

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Tentative recovery signs

The Bank of England said this week that mortgage approvals for house purchase were strong in March 2013, after falling in both January and February.

A total of 53,504 mortgage loans were granted for house purchase in March, up 3% from February's figure of 51,947 – a five-year low.

Nationwide added that it was seeing "tentative" signs of a pick-up in first-time buyer activity, with lending to FTBs up 18% at £2bn in the first two months of the year. In February, first-time buyers accounted for 43% of house purchase loans.