Land Registry shows December house price drop

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by Kay Murchie

According to figures from the Land Registry, the cost of a home in England Wales dropped by 0.4% last month. Land Registry figures have shown a fall in monthly house prices for the first time since August 2005.

The fall has meant the average cost of a home is now £184,469.

Just 3 regions bucked the trend with prices in the North East, the East and London rising 2.2%, 1.1% and 0.6% respectively.

Recent reports by Nationwide Building Society and Halifax (which are one-month ahead of the Land Registry figures) have already shown property prices falling over recent months, although Halifax recorded a 1.3% rise in December.

The monthly fall in the Land Registry figures led to house price inflation of 6.7% being recorded in 2007. The annual rate of property inflation has fallen from a peak of 9.7% in August and the 7.7% recorded last December.

The Land Registry commented on the figures and said that this month’s data provides evidence of a ‘downward trend’ in property prices. It added although the annual growth rate remains positive, this month’s price drop is a clear indication of a weakening market.

Furthermore, the amount of property transactions was also down on the same period last year, with an average of 103,374 per month in the months July to October 2007, compared with 117,086 per month from July to October 2006.

Nicholas Leeming of Propertyfinder.com concluded by saying the property market is an important force for the economy. People need to move home in order to take up new jobs and meet their family needs. The Bank of England must act decisively to cut interest rates and restore confidence in the economy and in the housing market.