CLG: House prices down 1.6% in February

House prices slipped by 1.6 per cent during February, according to the latest data from the Department for Communities and Local Government (CLG).

As a result, annual house price growth slowed from the eight per cent recorded in January to just 6.7 per cent in February.

The decline also marks a continuation of the falls away from the highpoint of 12.3 per cent, recorded in July 2007.

The findings follow those released earlier today by the Royal Institution of Chartered Surveyors (Rics), which show confidence in the property market is at the lowest level since 1978.

Both sets of research combined suggest the situation is now viewed as more of a concern than the house price slowdown of the early 1990s.

The average price of a property in the UK is now £217,737 - some £3,451 lower than the figure of £221,278 recorded in January.

The average price paid by a first-time buyer across the whole of the UK was £160,338 in February, while the average price paid by former owner occupiers was £251,797, finds today's house price index.

The CLG said February's fall in average prices can be accounted for by a 2.9 per cent drop in the price of flats, while detached and semi-detached homes lost 1.5 per cent of their value.

Furthermore, the cost of terraced properties fell by 1.1 per cent and the price of bungalows dipped 0.6 per cent.

The large drop in the cost of flats is of particular concern, as these properties are usually bought by first-time buyers, and suggest this group is still being adversely affected by the credit crunch.

Across the country the picture continues to vary.

The highest annual inflation rate in England was in London, at 9.5 percent, while Scotland also saw strong rises, with prices up by 9.7 per cent over the last year.

However, the annual rate of house price growth fell in ten of the UK's 12 economic regions, with only the north-west and West Midlands seeing a rise.

The largest falls were in Northern Ireland, with annual house price inflation falling from 8.4 per cent in December to 3.7 per cent in February.