FT: UK house prices up 0.5%

Property prices increased by an average of 0.5 per cent across England and Wales during February, according to the latest research from the Financial Times (FT).

The findings show the annual rate of growth in the UK property market was 6.1 per cent over the month, down from 6.8 per cent in January.

This represents the sixth consecutive drop in the annual rate, which now stands at the lowest level since June 2006.

Furthermore, the three-month rolling average is presently hovering around the zero per cent mark – suggesting a torrid time for the market as a whole.

However, London continued to strike ahead of the wider market, with annual growth of 12.7 per cent a month when averaged over the previous quarter – some five per cent ahead of the England and Wales average.

Without the influence of London, annual price increases would be reduced to 4.7 per cent.

"[The FT research] shows on an annual basis the market has been trending downwards and this view is backed by almost all the other market reporting," said Dr Peter Williams, chairman of Acadametrics, which carried out the research on behalf of the FT.

"There is nothing to suggest this downward trend won’t continue despite our marginally higher monthly figure, even though the fundamentals of demand and supply, employment and interest rates remain very favourable."

Outside of the capital the south-east and south-west have also recorded strong annual growth, of 7.8 and 6.8 per cent respectively.

However, these regions prove to be the exception to the rule.

At present seven of the ten regions of England and Wales have an annual growth rate of below five per cent, whereas a year ago none were in this position.

Yet, while the slowdown is expected to accelerate by the FT, the moderation in prices must be viewed in context of dramatic increases over the previous decade.

"Without doubt, 2008 will be a challenging year for all those involved with the housing market and not least for buyers and sellers," concluded Dr Williams.