Housing market slows in spite of rise in December

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by Kay Murchie

According to figures from the Department of Communities and Local Government (DCLG), the annual rate of house price inflation was 9.1% in December, down from 9.7% in November and the second consecutive monthly fall.

The figures also established that the cost of an average home rose by 9.1% in 2007 to reach £219,591. At the start of 2007, the index had reported that the average cost of a home was £201,090.

The figures are the latest to indicate a slowing in the property market with leading mortgage lenders predicting the market would be flat during 2008.

The DCLG said the UK annual house price inflation rate for the last quarter of 2007 (a more reliable indicator of the market) declined 10% from 10.5%.

The data compiled by the DCLG are behind by one month compared to other house price indexes. Figures published from the Halifax bank and the Nationwide Building Society signalled further falls in annual house price inflation.

Broken down regionally, the highest annual rate of inflation, was in London at 13.5% followed by the South East and East where prices are rising annually at 11% and 8% respectively.

The regions with the slowest growth were the West Midlands, North East and Yorkshire and the Humber at 4%, 4.4% & 5.8% respectively.

The average price paid by first-time buyers increased by 9.5% last year to £166,734, while the price paid by owner occupiers increased by 9% during 2007 to reach £245,522.