Though house price rises in the majority of the country are beginning to slow down, the London housing market continues to rise, as demand for property in the capital shows no signs of slowing down.
For those currently renting property, and first time buyers looking to get onto the housing ladder, the slowing of house price inflation around the country will be welcome news, though the Halifax reports that, for key public sector workers, 70% of towns are out of their price range.
According to the Financial Times’ house price index, the average UK house price reached £217,076 in March, and an increase of 0.7% on March’s figures. This means annual house price inflation is at 8.1%.
Peter Williams of Acadametrics, which compiles the FT house price index, told the FT that house prices are starting to level out:
“With the effects of past interest rate increases still working their way through the market and with the continuing threat of further interest rate increases, we expect to see the market remaining moderately subdued.
He added that London’s housing market is driving up the nationwide inflation figures:
“London continues to have a large impact on the national figures but it is a market driven by a wider range of factors than elsewhere. Excluding London, our annual increase would be 6.9%, rather than 8.1%.”
London house prices in March 2007 were 12.2% higher than for March 2006, while the next biggest rise was in East Anglia and the South West, at 8.5%. By contrast, prices in the West Midlands rose by only 4.7% year on year.
The Halifax house price index reported slightly different figures to the FT, putting property price rises at 1% in March and 11.1% year on year, though it reported the same general trend of a lowing down in house price inflation.