Government figures show a marginal drop in house price inflation |
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Published
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Mon, 11 Jul 2005 20:35
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The Office of the Deputy Prime Minister has released the figures for the month of May and these show that the house price inflation was controlled in this month. It saw a 6 percent growth in May as compared to the 6.9 percent in April.
However, the average house price in the month of May was £182,651, marginally higher than the £181,832 in April. The ODPM report showed that there was a 0.5 percent rise between April and May as compared to 1.3 percent in the same period last year. London saw a steep fall in the annual house price inflation, which stood at 1.6 percent for the month of May as compared to the 2.7 percent in April. Homes in London continued to be pricey with the average cost standing at £264,505. Homes in the northeast seemed cheap when compared to this with an average price of £130,474.
The house price inflation rate for the first time buyers dropped to 7.7 percent in May from the 9.8 percent in April. Overall, property prices for first time buyers registered a 0.1 percent rise as compared to the 0.2 percent that was prevalent at the same time last year. First time buyers paid an average of £150,259 for their homes in May as compared to £197,313 paid by others.
These figures confirm that for the first time since 2001, annual house price inflation has dropped behind the average earnings growth. And with the interest rates set to be chopped in August, the inflation looks to be under control just now. Howard Archer, the chief economist at consultancy Global Insight, who believes that “the housing market will see an extended period of relatively subdued activity and soft prices rather than undergo a sharp correction”, reinforced this belief.
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