Thu, 08 Mar 07
House prices increased by 1.8% in February, the Halifax reported today, fuelled by tight supply conditions.
The annual rate of house price inflation is unchanged at 9.9% for the third successive month making the average house price £192,233.
All houses, all buyers index (1983=100)
Index (seasonally adjusted)
Standardised Average House Price (seasonally adjusted)
Low supply - both in terms of new house building and second-hand properties available for sale – is continuing to exert upward pressure on house prices, said the lender, particularly in London. The ratio of completed home sales to the stock of available property increased further in January, making market conditions the tightest for more than two and a half years.
On a quarterly basis the rate of house price growth has more than halved. Over the past three months, UK house prices have increased by 2.3%, compared to 4.7% in the previous three months.
Other housing market indicators suggest a modest slowdown in activity is emerging. New buyer enquiries fell in January, following a slowing in the final three months of 2006. Mortgage approvals in January were 6% below the peak seen in November 2006. Negative real earnings growth is also putting pressure on householders' finances.
Halifax chief economist, Martin Ellis said, “Pressure on householders' finances due to negative real earnings growth, higher interest rates and above inflation council tax rises are likely to curb housing demand, resulting in a gradual slowdown in house price inflation later this year."
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