December property inflation drops by 0.4%

The Land Registry, which provides the most reliable data on UK house prices, has reported that house price inflation in England and Wales dropped by 0.4% in December.

The decline brings the annual rate of inflation down to 6.7%, as compared with 8.1% in November.

In December, the average price of a home stood at £184,469, compared with £186,009 in November.

Many regions recorded price cuts, with the largest drop in the East Midlands (3.3%), where annual house price inflation has now fallen to 0.5%.

Prices increased in North-east England (2.2%); Eastern England (1.1%) and London (0.6%).

The capital’s annual house price inflation stands at 14.3%, but the Land Registry points out that the figure reflects high price growth at the end of 2006 and beginning of 2007, which will shortly no longer be included in the annual index.

In December, the average price of a property in the capital was almost twice that of England and Wales, at £354,625.

Transactions have also decreased with an average of 103,374 per month during the period July to October 2007, compared with 117,086 in the same period of 2006.

The Land Registry describes the December figures as “evidence of a downward trend in house prices.”

A recent forecasts for the property market comes from the Centre for Economics and Business Research, which is predicting that the average property prices will drop by 2.5%, or £11,000, during 2008.

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