Property prices rise at just 7%
GOVERNMENT figures today revealed a sharp slowdown in the UK property market with London leading the way. A fall in the price of detached houses in April was largely to blame.
The Office of the Deputy Prime Minister (ODPM) said annual house price inflation in April stood at 6.9%, down from 12.6% in March.
The price of the average home fell to £181,832, down 0.8% from £183,346 a month before ? although the ODPM warns against a month-on-month comparison of the figures which do not take into account seasonal demand.
The annual rate of house price inflation was lower in all regions, with London recording the most dramatic slowdown. Values in the capital in April stood just 2.7% higher than a year earlier, down from a growth rate of 9.8% in March.
'The fall in UK prices between March and April can be largely attributed to a fall in the price of detached houses,' said the OPDM in a statement. 'Prices for detached houses fell by 3.5% and for flats by 0.4%, with slight increases for other dwelling types [such as semi-detached and terraced homes].'
Among the home countries, property price inflation fell from 12% to 6% in England, from 22% to 15.9% in Wales and from 16.1% to 14.3% in Scotland.
The English regions also saw a sharp slowdown ? price growth was strongest in the North-West at 12.9% but it was down from 19.2%. Growth in the North-East was 11.9% compared to 19.4% before. Price inflation was just 4% in the South-East, down from 8.1%.
There was also more good news for those looking to get a foot on the property ladder. Prices for first-time buyers grew at an annual rate of 9.8% compared to 18.3% a month before.
'The sharp fall in annual house price inflation? may well add to fears that thehousing market could yet suffer a sharp correction,' said Howard Archer, economist at City research firm Global Insight. 'However, it is in reality bringing the annual house price inflation rate more in line withthat reported by the Nationwide and Halifax.
'We continue to believe that the housing market will avoid a sharp correction, although we acknowledge that the risk of this happening would increase significantly if the economy slows markedly for anextended period and unemployment starts to rise significantly. Instead, we forecast that there will be an extended period of relatively subdued housing market activity and soft prices.'
Earlier this month, Halifax said the annual rate of increase for UK house prices was 5.7% in May, the lowest rate for four year. Nationwide put the figure at 5%. Both lenders were reporting year-on-year increases of more than 20% last summer.
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