Housing minister: House prices to fall between five and 10 per cent "at best"
Housing minister makes house price admission
Tuesday, 13, May 2008 02:09
Housing minister, Caroline Flint, has accidentally revealed her concerns about the state of the UK property by revealing she now expects house prices to fall by between five and 10 per cent this year "at best".
Her prediction was revealed after she emerged from the weekly cabinet meeting at 10 Downing Street carrying her official briefing notes, which could be seen by waiting photographers.
The document, headed "Caroline Flint - speaking notes", had a sticker attached which said: "Papers for Cabinet meeting 13 May 2008".
The housing minister is believed to have admitted "we can't know how bad it will get" to her colleagues as well as that house-building was "stalling" - despite government assurances they will be increasing the building of new homes across the country.
The briefing notes also stated: "Given present trends, they [houses] will clearly show sizeable falls in prices later this year - at best down 5%-10% year on year."
"But it is vital that at this time of uncertainty we show that we are on people's side," the document concludes
The news comes as her department released figures which show the rate of house price growth slipping by 1.1 per cent.
Department for Communities and Local Government (DCLG) figures show the average house price grew by 5.2 per cent in the year to March 2008, down from 6.3 per cent in the year to February 2008. The result was that the average house price grew to £217,344 in March 2008, up from £217,089 in February 2008.
Between February and March house prices barely moved with an increase of just 0.1 per cent in the price of properties compared with a larger rise of 1.1 per cent over the same period last year. The DCLG says this caused the fall in the annual average price.
Annual house prices fell in eight of the English regions and but rose in the North East.
In England annual growth in house prices fell from 6.3 per cent February to 5.2 per cent in March. In Northern Ireland annual growth in house prices fell from 4.7 per cent in February to -1.2 per cent in March. Meanwhile in Scotland annual growth in house prices stayed the same in March 2008 at 9.3 per cent, and in Wales annual growth in house prices rose from 3.3 per cent in February to 4.1 per cent in March.
The highest annual house price growth was in London (7.6 per cent) followed by the South East (6.7 per cent), and the East (5.9 per cent). Annual house price growth was lower in the North East (4.9 per cent), South West (3.8 per cent) and the East Midlands (3.3 per cent). The lowest annual house price rates of change were in Yorkshire and the Humber (2.7 per cent), the West Midlands and the North West (2.4 per cent each).
Mix-adjusted average house prices in March 2008 were £224,668 in England, £166,484 in Wales, £163,687 in Scotland and £217,413 in Northern Ireland.
The English region with the highest average house price in March remains London at £340,167. The lowest average price was in the North East at £149,888.
Of the English regions, only the East, London, South East and the South West had average prices above the UK average
Meanwhile the annual UK house price growth rate for first time buyers fell from 6.1 per cent in February to 4.9 per cent in March.