CLG: House prices continue to fall

12-08-2008

CLG: House prices continue to fall
House prices fell by 0.7 per cent month-on-month in June, according to the Department for Communities and Local Government (CLG).

This was in marked contrast to a rise of 1.6 per cent in June 2007.

However, annual growth remains positive, with the yearly increase in property prices hovering at just 0.6 per cent in June.

As a result, the average price for a property in the UK was some £215,029 in June 2008.

The English region with the highest average house price in June remains London at £336,545. The lowest average price was in the north-east at £147,195.

The official government findings are at odds with declines reported by both studies from both Nationwide (-8.1 per cent) and Halifax (-8.8 per cent).

However, it should be remembered that CLG figures provide lagging evidence on house prices, as the department calculates its index at the time when mortgages are completed. Furthermore, the Halifax and Nationwide data are for July.

Across the country the CLG reports regional variation.

In England, annual growth fell from 3.1 per cent in May to 0.5 per cent in June, while in Scotland annual house price growth fell from 5.9 per cent in May to 5.7 per cent in June.

Furthermore, Wales saw annual house price growth fall from 0.8 per cent in May to an annual price fall of minus one per cent in June, whereas in Northern Ireland annual growth in house prices fell from -7.5 per cent in May to -9.4 per cent in June.

The average price paid by first time buyers across the whole of the UK was £159,606 in June, while the average price paid by former owner occupiers was £247,917.

"It seems odds-on that house prices will continue to head rapidly south," explained Global Insight analyst Howard Archer.

"Elevated affordability pressures on potential house buyers stem from high house prices, modest disposable income growth and the squeeze on purchasing power coming from soaring utility bills and high food prices, while very tight credit conditions have led to markedly fewer and more expensive mortgages being available."

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