Annual price inflation rises

Published: April 08, 2008

A typical UK property was worth £191,556 in March, according to the latest Halifax House Price Index.

That is an annual increase of 1.1 per cent, with monthly increases recorded in many parts of the country.

Positive price growth was recorded in East Anglia (1.4 per cent), Greater London (1.6 per cent) and the East Midlands (2.2 per cent).

Although overall month-on-month prices fell by 2.5 per cent, Halifax chief economist Martin Ellis said that this figure needs to be looked at in context.

"Overall, we expect there to be a modest fall in UK house prices this year. Any declines, however, should be viewed in the context of the significant price rises over recent years," he commented.

"The average UK price has risen by £120,860 during the past decade from £70,696 to £191,556; an increase of 171 per cent.

"Sound economic fundamentals are supporting house prices. A strong labour market, low interest rates and a shortageof new houses underpin housing valuations," continued Mr Ellis.

Homebuyers may be boosted by a cut to the base rate of interest this week, with a number of analysts forecasting a 0.25 percentage point reduction.