Land Registry: House prices up 0.6%

Thursday, 3 January 2008 12:00 AM

House prices in England and Wales increased by 0.6 per cent during November.

The gloom may already be beginning to lift from over the housing market, as the latest Land Registry release finds prices increased toward the end of last year, with an average increase of 8.1 per cent now reported.

The news follows a 0.1 per cent increase in October, and suggests the perceived problems in the housing market may have been exaggerated.

London fared particularly well over the month, with average property prices up 1.1 per cent during November.

Land Registry research also finds the average property price in England and Wales is now £186,009.

However, the relatively large increase in house prices may have been caused by a fall in the number of transactions in the market.

In the months June to September 2006, transaction volumes averaged 119,580 per month, but this had fallen to 108,678 a month in 2007.

Prices are more volatile when there are lower transaction volumes, and this may account for a part of the change in house prices, argues the Land Registry.

Across the country the West Midlands saw the strongest growth outside the capital, with prices up one per cent over the month.

Strong growth, of 0.7 per cent, was also recorded in Wales.

However, prices in the north-east fell by 0.9 per cent - the only fall in England and Wales.

Commenting on the data Nicholas Leeming, major clients director at PropertyFinder.com, said: "Today's data shows the housing market is remarkably resilient in the face of the credit squeeze.

"Price growth has slowed as buyers and sellers have reached a stalemate, but sellers' reluctance to accept low offers, indicates we are not in an environment of forced sales."

However, the future appears gloomy.

"The first half of 2008 will see price growth slow to a crawl and the monetary policy committee (MPC) should act sooner rather than later to spur confidence in the market and encourage a recovery in the housing market, one of the engines of the British economy," concluded Mr Leeming.

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