House price inflation cools
According to new figures from the Nationwide, house price inflation fell below 10 percent in March. The building society reports that house prices were up by 0.4 percent in March after going up by a revised 0.6 percent in February. This brings the annual rate of growth to 9.3 percent, down from 10.2 percent in February. The Land Registry also released its new data, which says that house prices were up by 1 percent in February, a bit higher than the Nationwide has reported but not nearly as high as the 1.8 percent growth reported by the Halifax (LSE: HBOS). However, the Land Registry also shows that annual house price inflation was higher in February, at 8.5 percent, than it had been in January, at 7.7 percent.
Land Registry statistics also show that there are huge regional variations in house price inflation. According to its numbers, house prices were up by 11.3 percent in London in February, while prices in Wales dropped by 3.9 percent in the same month. That decline was the biggest drop in the seven years that the Land Registry has been doing its survey.
All of this has analysts suggesting that the housing boom in the UK might finally be slowing down, as rising interest rates have made it more difficult for many people to afford to buy a house. This is especially so after the British Bankers’ Association reported on Tuesday that new mortgage approvals are down to their lowest point, when adjusted for the season, since the middle of 2005. Still, prices are expected to stay high for a time as they are supported by low supply, as fewer people have been putting their houses up for sale and the number of new houses being built are not rising to demand.
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