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Latest data from the Halifax shows house price growth continuing to slow - June's 0.4% increase marking the second successive monthly rise of less than 0.5%. Overall, house prices rose by 2.0% in Q2 2007, less than the 3.0% increase in Q1 2007 and well below the 4.2% rise in Q4 2006. Quarterly year-on-year house prices are now running 10.7% ahead. The standardised average house price (seasonally adjusted) stands at £197,461.
Northern Ireland is presently the most expensive part of the UK outside London and the South East - a far cry from early 2005 when Scotland was the only part of the UK with lower average house prices than Northern Ireland.
House prices increased in most regions during Q2 2007 - the biggest price rises evident in Northern Ireland (8.5%) and Greater London (4.9%).
Elsewhere, there were house price falls in the South West (-0.4%), West Midlands (-1.1%) and Wales (-2.8%). These modest declines, however, should be seen in the context of the substantial price rises recorded in all three areas over the past 5 years: South West (63%), West Midlands (81%) and Wales (116%).
As for milestones, the average house price in the North passed £150,000 for the first time in Q2 2007, reaching £155,188. Scotland (£140,262) and Yorkshire & the Humber (£149,051) are now the only parts of the UK where the average price remains below £150,000.
Meanwhile, the north/south divide in England has re-emerged over the past year - Greater London (18.4%), the South East (14.0%), East Anglia (10.9%) and South West (10.0%) all having recorded double digit house price growth since Q2 2006.
All the other English regions have seen single digit growth over the period. As a result, the difference between the average price in northern England and that in the south has widened from £81,681 in Q2 2006 to £103,451 in Q2 2007.
Commenting on the figures, Martin Ellis, Chief Economist of HBOS says the increases in mortgage rates and the persistence of negative real earnings growth in the early months of 2007 are expected to cause annual house price inflation to slow further over the coming months.
Nonetheless, solid economic fundamentals and a shortage of housing supply will continue to support house prices, he adds.
04 July 2007 © Moneyextra.com
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