FT: House prices up 0.5% in November

Friday, 7 December 2007 12:00 AM

House prices in England and Wales rose by 0.5 per cent in November, according to the Financial Times.

The increase comes as a surprise given recent findings from other major surveys, including Halifax and Nationwide, suggesting prices are in decline.

However, annual house price growth has moderated from the 10.2 per cent recorded in October, to 9.1 per cent in November.

This is the lowest rate of annual growth recorded since January.

"The FT index is based on all property transactions in England and Wales, and our evidence of a softening market is very much in line with other indices despite the different reporting bases.

"The prices on which the FT index is based reflect transactions agreed some weeks ago. With continued weakening in consumer confidence and the further negative commentary on market prospects in 2008, we would expect this downward trend to continue," said Dr Peter Williams, chairman of Acadametrics, who carried out the research for the FT.

Once again London is completely out of step with the rest of England and Wales.

Averaged over the last three months the capital saw annual growth of 18.5 per cent - almost twice the level recorded in the next strongest market.

Outside the London the southern regions, the south-east (nine per cent) and south-west (9.7 per cent), have recorded the strongest annual growth.

"London had a strong month and this helped keep prices higher.

"If we strip London out of the assessment the overall monthly increase for England and Wales was down by 0.2 per cent to 0.3 per cent, and the annual rate to 6.7 per cent, i.e. well over two percentage points lower," continued Mr Williams.

The survey provides further evidence the market is slowing, but the correction must be viewed in terms of unprecedented growth over the last decade.

Property prices are underpinned by a buoyant economy, low unemployment and shortage of supply.

"The current state of flux in the funding markets, and the tightening of the access to and the cost of credit, suggest that 2008 will be a challenging year and one in which house price prediction will be particularly difficult," concluded Mr Williams.

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