CLG: House prices up 0.4%

Monday, 11 February 2008 12:00 AM

The average price of a property in the UK increased by some 0.4 per cent in December, according to the latest house price index from the Department for Communities and Local Government (CLG).

AS a result the average property now costs £219,591 - up from £218,662 in November 2007.

However, annual house price inflation continued to fall.

The 0.4 per cent growth was lower than the 0.9 per cent recorded the previous year. As a result annual growth fell from 9.7 per cent in November to 9.1 per cent in December.

In London annual house price growth slipped back from the 14.5 per cent recorded in November, to 13.5 per cent in December.

The south-east, with annual growth of 11 per cent, experienced price acceleration ahead of the national trend.

Yorkshire and the Humber, 5.8 per cent, the north-east, 4.4 per cent and the West Midlands, four per cent, all saw annual growth well below the national average.

There was, however, a slight fall in the amount paid by first-time buyers for a property, according to the CLG research.

The UK house price inflation rate for first-time buyers fell from 9.8 per cent in November to 9.5 per cent in December.

As a result the average price paid by first-time buyers across the whole of the UK was £166,734 in December.

Commenting on the figures Howard Archer, of analysts Global Insight, said: "The CLG tends to provide lagging evidence on house prices as the office calculates its index at the time when mortgages are completed.

"Neverthless, the data reinforce the general view that house prices are currently cooling markedly - but not collapsing - in the face of increased affordability pressures and tightening lending practices. We expect these factors to continue to bite over the coming months."

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