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Annual house price growth falls in May

Annual house price growth falls in May

Friday, 27 June 2008 12:00 AM

Annual house price growth declined for the ninth month in a row in May to 1.8 per cent.

Although there has been no monthly change in house prices, following falls in April of 0.2 per cent and March of 0.4 per cent, annual house price growth continues to decline, according to official figures from the Land Registry.

The average house price this month is £183,266. This means values have fallen by an average of £360 from last month, when the average price stood at £183,626.

In addition, fewer people are buying and selling, the Land Registry found - sales volumes in England and Wales during March 2008 decreased by a massive 50 per cent to 53,080, from 106,047 in March 2007.

House prices in London staged a slight recovery, growing at 6.9 per cent in May. This is an improvement on April's 6.8 per cent but still not as high as March's 10.5 per cent.

The average property value in London currently stands at £354,714 - costing Londoners £171,448 than the rest of the country.

Four regions in England and Wales - the north east, the south-west, Wales and the West Midlands - experienced decreases in their average prices over the last 12 months.

The East Midlands saw the highest monthly rise with an increase of 1.1 per cent.

But the north-east saw the biggest falls, with a significant annual price fall of 1.3 per cent and a monthly decline of 2.4 per cent.

Nationwide and Halifax have been reporting drops of 3.8 and 4.4 per cent year-on-year respectively. Many people, including the government, expect the property market to fall this year - although predictions range from a reduction of around ten per cent to a third.

"The current housing market should bring greater purchasing power. But we're in uncharted waters with this housing slowdown," explained Ross Bowen, managing director of Connells Survey & Valuation.

"It's not lack of demand for homes that's putting pressure on house prices, but lack of liquidity in the money markets.

"The lack of credit means lenders offering good mortgage rates are being inundated with demand they can't support so they are forced to pull down the shutters," he added.