The thing about having three prominent house prices indices, all of which publish monthly figures, is that they are forever telling conflicting stories. Indeed, today’s Nationwide index, itself, nods in two different directions: prices were down 0.2 per cent in March, but the annual gain in prices was up from 1.2 per cent in February to 1.6 per cent in March. So is the housing market up or down?

The first thing to note is that the Nationwide index is seasonally-adjusted – a process which is always at risk of giving a perverse outcome because it assumes that the same pattern of housing market activity will be repeated every year. Prices could well go up, but if that rise is less than in previous years, then in a seasonally-adjusted index it could register as a fall. Moreover, the Nationwide and Halifax indices – which are derived from limited amounts of data from the lenders’ own mortgage approvals – were never designed to be read month on month. Their quarter on quarter or annual figures are more instructive.

That said, it should not come as too much of a surprise if interest from homebuyers dipped a bit in February and March. The year began with lenders reducing fixed rate mortgages in anticipation of falling interest rates later in the year. Markets are still expecting three cuts to the Bank of England’s base rate this year, but the curve has changed and the rate cuts are now expected a bit later than they were at the beginning of the year. Consequently, lenders for a while reversed course and started raising their fixed rates. However, many fixed rates are now falling again.

The annualised changes in house prices, however, do tell an interesting story. Prices are up most strongly in Northern Ireland (4.6 per cent) and the North of England (4.1 per cent). They are down the most in the East Anglia (-1.3 per cent) and the South West (-1.7 per cent).

In the case of the South West we may well be looking at the first signs of a reversal in the market for second homes caused by tax and regulatory changes. As I wrote yesterday, most English councils have taken advantage of the government giving them the freedom to levy double council tax on second homes. Moreover, buyers of furnished holiday lettings will no longer be allowed to count their mortgage interest repayments against tax – a change which has already been enforced for properties in the long-term rental market. It would not be a surprise if the apparent war on second homes has led to fewer people looking to buy homes and to some people deciding to sell up.

But generally, it is hard to see strong deflationary forces in the housing market at the moment. Interest rates are still expected to fall, while wages are rising strongly. House prices may seem at extraordinarily high multiples of average earnings by historical standards. But there is little reason to expect much in the way of further falls in house prices this year save for in some niche markets.  <//>