Halifax data shows regional variation
Halifax data shows regional variation.
House prices declined by 2.5% last month from February, the Halifax reported earlier this week. (see Peter's featured article below on current house price hysteria) The country's largest mortgage lender said the yearly rate of house price inflation had fallen to 1.1%, from 4.2% in February.
Gordon Brown responded to growing media reports of a slump in the housing market by proposing that ministers meet the Council of Mortgage Lenders in the next few days to ensure banks phase in higher rates and give mortgage payers clear warning of them. Ministers are concerned that as many as 4 million mortgage payers are facing a big rise in interest payments over the next year.
The other main housing index, from the Nationwide, showed prices fell 0.6% in March, the fifth monthly decline in a row. Nationwide, which released its data at the end of March, also put the annual rate of change at 1.1%. On the back of its latest numbers, the Halifax cut its house price forecast to a small decline this year.
Halifax said prices fell 1% in the first quarter of this year, compared with the last quarter of 2007, and there had been a mixed regional picture in the first three months of the year. The biggest rises were in Greater London, where prices rose 1.6%, although that contradicted other surveys which have suggested asking prices are holding up but agents are reporting an absence of demand, particularly from first-time buyers.
Halifax also said prices rose 1.4% in East Anglia and 2.2% in the East Midlands in the first quarter, while they fell 5% in the West Midlands and 4.7% in Wales.
The Halifax's chief economist, Martin Ellis, said that the average house price had risen by £121,000 over the past decade to £191,000, an increase of 171%. "A strong labour market, low interest rates and a shortage of new houses underpin housing valuations. Our research shows that the labour market is the key driver of the housing market. Employment is at a record high and unemployment continues to fall."
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