Government house price data leaves room for optimism
Latest figures the Department for Communities show a 0.1% increase in the average price of a UK home, in October.
The data shows the average price of a flat decreasing by 0.7% while terraced houses fell in value by 0.4%, and detached homes saw a 0.8% rise.
The figures, which are published over a month later than many other house price tables, are valued for their accuracy and mean that the cost of an average house stood at £220,195 in October, having increased by £220 during the month.
This supports the view that property market is slowing down substantially but contradicts data from Halifax, the UK’s largest mortgage lender, which reported a 0.6% decrease in house prices in October.
The Government figures put annual house price inflation at 11.3% for the year to the end of October, up from 10.8% in September.
Taking a regional perspective, annual growth was at its lowest in the North East at just 5.2%, followed by the East Midlands at 6.4%.
The rate of property inflation declined in both regions during October, as well as in Yorkshire and Humberside.
Northern Ireland retains the highest level of annual house price inflation, at 32.5%. London follows on at 17.7% (up from 16.5% in September) and house price inflation is still in double digits in Scotland and the South East.
In October, first-time buyers were paying an average of £166,764 for a home, 10.9% more than in October 2006 but less than a month earlier when they would have paid 11.8% more than in September 2006.
Commenting on the figures, Howard Archer, chief UK and European economist at Global Insight, the economic forecasting consultancy, said: “While modest annual falls in house prices are highly possible in 2008 and prices seem set to remain pressurised for an extended period, at this stage we do not expect to see a sharp correction.”
Mr Arches believes “that the downside for house prices will be limited by a lack of supply, the increasing number of households, high employment and the fact that few vendors are currently having to sell for ‘distressed’ reasons”.