House price inflation on the up

Latest figures from the Department for Communities and Local Government show annual house price inflation hitting 11.3% in April, up from 10.9% in March; and annual house price inflation in London rising to 14%, up from 13.9% in March. UK annual house price inflation for the 3 months to April was 11.3%; 14.7% in London.

The rise in prices between March and April can be attributed to increases in average prices for bungalows 1.9%, terraced houses 1.7%, semi-detached dwellings 1.4%, detached properties 0.8% and flats 0.7%.

Wales saw a decrease in inflation in April, from 9.7% to 9.0%. But England, Scotland and Northern Ireland all saw house price inflation increases. In England inflation rose from 9.8% to 10%; in Scotland from 14.8% to 17.8% and in Northern Ireland from 50.1% to 54.1%.

In England, the highest inflation rate was in London 14% followed by the South East 10.6% and South West 10.0%. Inflation rates were lower in the East 8.6%, Yorkshire and the Humber 8.2% and East Midlands 8.1%. The lowest rates were in the North East and North West both 7.9% and West Midlands 7.1%. Meanwhile, the house price inflation rate for first time buyers rose from 10.8% to 11.2%.

Mix-adjusted average house prices in April were £216,707 in England, £162,170 in Wales, £155,516 in Scotland and £228,208 in Northern Ireland.

The English region with the highest average house price in March remained London at £320,191. The lowest was in the North East at £145,875.

Of the English regions, only the East, London, South East and the South West had average prices above the UK average.

Responding to the figures, Capital Economics said the data suggests that house prices are continuing to rise at a solid pace. However, it also said it's worth keeping in mind that the CLG's data lags other indices by 1-2 months and also measures house prices at the completion stage. As such, the index will take longer to show the impact of cooling mortgage demand and buyer confidence on house price growth.

CE added that it expects the signs of cooling activity in the early stage of the house buying process to feed through to house price inflation further down the chain in the coming months, with markedly slower house price growth by the end of the year.

Moneyextra.com recommends you take independent financial advice before acting on any article

2007-06-11 12:31:21 © Moneyextra.com