House prices start to slow?

Nia Williams

February 4, 2010

While prices rose for the seventh consecutive month, January’s rise was the lowest during this period and was significantly below the 1.1% average over the previous six months.

Nevertheless, prices have risen by 9.9% since reaching a low in April 2009; an increase in the average price of £15,287 over this period. This follows a decline of 23% between August 2007 and April 2009. The average house price is now £169,777.

House prices in January were 3.6% higher on an annual basis. This is the largest increase in the annual rate of change – measured by the average for the latest three months against the same period a year earlier – since February 2008. The comparable rate a year ago was –17.2%.

Commenting, Martin Ellis, Halifax housing economist, said: “House prices rose by 0.6% in January. This was the seventh successive monthly increase and takes the average price to 9.9% above its trough in April 2009. January’s rise, nonetheless, was more modest than in any of the previous six months.

“The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market. Increased demand has combined with a low supply of properties available for sale to push up prices.

“There are some signs that more people are putting their homes on the market. A further increase in the supply of property is possible over the coming months, which would help to curb upward pressure on prices. Overall, our current view is that house prices will be flat during 2010.”

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