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News: UK prices continue steady slowdown

Mon, 12 Nov 07

House prices in the three months to October were 0.3% higher than in the previous quarter, continuing steady downward trend experienced since the end of 2006...

The UK economy is strong with gross domestic product (GDP) increasing at an annual rate of 3.3% in 2007 Q3, comfortably above the long-term average rate of 2.5%. A mixed pattern of monthly price rises and falls is a typical feature of a more subdued housing market. It is not unusual to see successive monthly falls in these circumstances.

Activity is declining. Mortgage approvals to fund house purchase fell by 6% in September and approvals in 2007 Quarter 3 were 11% lower than in 2006 Quarter 3. New buyer interest in purchasing a house fell for the tenth consecutive month in September, demonstrating that potential buyers have become more cautious.

Commenting, Martin Ellis, chief economist, said: "House prices fell by 0.5 per cent in October.  Prices in the three months to October were 0.3% higher than in the previous quarter – a good guide to the underlying trend - continuing the steady easing in house price growth since the end of 2006. 

The rise in interest rates since August last year and negative real earnings growth so far this year are curbing housing demand, leading to a slowdown in both price growth and activity.

The UK economy is in a strong position. Sound market fundamentals, including high levels of employment and a shortage in the number of properties available for sale, will continue to support house prices."

UK House Prices: Historical DataAll Houses, All Buyers (Seasonally Adjusted)

 

 

 

Index

1983=100

1

Standardised

Average

Price

£

2

 

Monthly

Change

%

 

Annual

Change

%*

 

Price/

Earnings

Ratio *

3

Period

2002 Q4

392.1

121,137

-

26.4

2003 Q4

455.3

140,687

-

15.4

2004 Q4

523.5

161,742

-

15.1

2005 Q4

550.3

170,043

-

5.1

2006 Q4

605.1

.

186,954

-

9.9

Oct

598.0

184,765

1.6

8.6

5.53

Nov

608.0

187,855

1.7

9.6

5.61

Dec

602.6

186,181

-0.9

9.9

5.53

Jan 2007

611.1

188,826

1.4

9.9

5.59

Feb

622.5

192,349

1.9

9.9

5.61

Mar

629.7

194,565

1.2

11.1

5.74

Apr

635.6

196,387

0.9

10.9

5.79

May

636.7

196,720

0.2

10.6

5.77

June

639.0

197,450

0.4

10.7

5.76

July

643.9

198,936

0.8

11.2

5.79

Aug

646.0

199,600

0.3

11.4

5.78

Sept

641.8

198,305

-0.6

10.7

-

-

Oct

638.4

197,248

-0.5

8.9

-

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