House price gap leveling off, while house price inflation dips below 10 percent

House price gap leveling off, while house price inflation dips below 10 percent

	Published : Sun, 23 Oct 2005 11:05 By : James Rowe Print this Story

LONDON - House price inflation in the country has come down considerably over the last year and has now reached to 10 percent pa. This is the lowest level since first quarter of 1999, a new research by banking group Halifax says.

It was also found that the north-south divide in house prices has narrowed significantly. This gap has now reached to its lowest level in eight years. House prices in the south of the country are now 1.58 times the average in the north.

These prices have come down from being twice over in 2002. Britain's biggest mortgage lender said that while the house prices in southern England were leveling off, a number of towns in Scotland and Wales had registered increases of more than a third.

Coatbridge in Strathclyde was the hottest property over the last year with a 36 percent increase in property prices, while Port Talbot in south Wales stood second with a rise of 35 percent. Inverurie in Grampian with 32 percent and Lochgelly in Fife with 31 percent followed close behind. However, the annual rate of house price inflation slowed in all parts of the country.

"Areas of Scotland have recorded the highest house price rises over the past year whilst many towns and counties in southern England have experienced modest prices falls," observed Martin Ellis, Halifax's chief economist. "These falls however, need to be viewed in the context of the substantial price rises recorded in these parts of the country during the past few years."

Hertfordshire saw the biggest drop in property prices with a 6 percent dip followed by Surrey, Somerset, Northamptonshire, Warwickshire and Dorset, all of which saw a 5 percent dip in prices.

The housing market was showing signs of stability and there was no threat of any imminent crash, Ellis said adding, "Employment continues to grow. Average earnings growth is outpacing price inflation and mortgage payments as a proportion of gross income for the average new borrower is close to the long run average."