Flats contribute to housing slowdown

| August 12, 2008 | 0 Comments
Flats contribute to housing slowdown

Official figures show that a decline in the prices of flats has become a major factor in the housing market slowdown.

Between May and June, a 3.6% fall in the price of flats contributed to the price of the average home falling from £216,625 to £215,029, according to the Department for Local Government and Communities (DCLG).

Despite the slowdown in the housing market, the DCLG said prices still increased by 0.6% in the 12 months to June with house price growth the strongest in Scotland.

Earlier this month, the Halifax House Price Index revealed property prices fell 1.7% in July, and were in line with rival Nationwide, who also said prices were 1.7% lower in July.

However, unlike these surveys, which are weighted according to transactions, the figures from DCLG are based on information from lenders and are slightly behind.

The DCLG said annual house price growth in the UK slowed for the eight month in a row. In June, it was 0.6%, which was down from an annual rate of 3% in May and 7.9% in January.

In England, annual growth in house prices fell to 0.5% in June from a rate of 3.1% in May, and in Scotland it was down to 5.7% from 5.9%.

Prices fell year-on-year by 1% in Wales and by 9.4% in Northern Ireland.

In the English regions, prices still increased slightly compared with June last year with the South East, the East, London and Yorkshire and the Humber, up 1.8%, 1.5%, 1.4% and 0.7% respectively.

Meanwhile, prices fell year-on-year in the North East, the South West, the North West, the East Midlands and the West Midlands, and were down 0.2%, 0.4%, 1.1%, 1.1% and 1.9% respectively.

The figures from the DCLG have been revised slightly due to some fresh data being supplied by lenders.

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