House prices fell again in March. A 0.8 percent monthly decline in the Nationwide measure was steeper than the market consensus and the seventh drop in a row. Following an unrevised 0.5 percent slide in February, this reduced annual inflation from minus 1.1 percent to minus 3.1 percent, only its second sub-zero reading since June 2020 but the largest decline since July 2009.

The March data put the first quarter change at minus 1.9 percent, up from minus 2.2 percent in the three months to February but its fifth consecutive negative print and clearly indicative of a weakening trend. All regions posted a quarterly fall. Looking ahead, consumer confidence remains historically weak and deposit requirements for first-time buyers prohibitively high but supply shortages remain supportive. In sum, the near-term outlook for prices remains soft.

More generally though, today's data put the UK's ECDI at 19 and the ECDI-P at 17, both values showing that overall economic activity is now outperforming market expectations.

Prices are expected to fall 0.3 percent on the month following a 0.5 percent drop in February.

The Nationwide House Price Index (HPI) provides house price information derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted; that is, they track a representative house price over time rather than the simple average price.

Home values affect much in the economy especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.

Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.

Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.