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CLG: House price growth lowest for two years

Friday, 16 May 2008 7:48 AM

House price growth has slipped to the lowest level for 23 months, according to the latest data released by the Department for Communities and Local Government (CLG).

According to official research, annual house price growth slipped to just 5.2 per cent in March, the lowest for over two years.

This was a substantial fall from the 6.3 per cent recorded in February, and adds further evidence to a sharp correction in the market.

The news follows a leaked report from housing minister Caroline Flint which finds house prices could fall between five and 10 per cent at best during the present slump.

The CLG research, however, finds there was a 0.1 per cent increase in the average property price across the UK during February and March.

However, this was less than the increase recorded for the same period of 2007, resulting in the annual fall.

This small rise in monthly UK prices can be attributed to increases in average prices for flats, which saw a rise of 1.8 per cent and detached house, which saw prices bumped up by less than 0.1 per cent.

Yet, these rises were offset by decreases in average prices for bungalows, falling by 0.5 per cent, semi-detached houses (0.4 per cent), and terraced houses (0.3 per cent).

It is, however, Northern Ireland which is bearing the brunt of the present correction in prices.

After a decade of unprecedented growth, the province saw annual growth in prices fall from 4.7 per cent in February to -1.2 per cent in March.

In contrast, Scotland maintains its strong record, with annual price remaining at 9.3 per cent in March, while Wales saw annual growth rise from 3.3 per cent in February to 4.1 per cent in March.

In England the highest annual house price growth was recorded in London (7.6 percent) followed by the south-east (6.7 per cent), and the East (5.9 per cent).

As a result, average house prices in March 2008 were £224,668 in England, £166,484 in Wales, £163,687 in Scotland and £217,413 in Northern Ireland.

The average price paid by first-time buyers across the whole of the UK was £161,250 in March, while the average price paid by former owner occupiers was £250,630.

Chris O'Toole

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