House price inflation declines

Annual house price inflation dropped to 6.9% in April, a sharp fall from 12.6% in March, according to the latest figures from the Office of the Deputy Prime Minister (ODPM).

The ODPM also reported a fall in mix-adjusted prices of 0.8% between March and April, which contrasted sharply with the 4.5% rise during the same period in 2004. The average house in the UK in April was £181,832, a drop from March’s figure of £183,346.

However, the ODPM said that the figures could have been affected by this year’s earlier Easter period, as there are always rises in house prices at Easter.

The inflation rate dropped in all regions, falling from 12% to 6% in England; from 22% to 15.9% in Wales and from 15.8% to 10.7% in Northern Ireland. The fall in growth was slightly less in Scotland, falling from 16.1% to 14.3%.

House price inflation also fell across all the regions. The highest inflation rates remained in the north of England, at 12.9% in the northwest and 11.9% in the northeast. The lowest inflation rate was in London, where inflation fell from 9.8% in March to 2.7% in April. The ODPM attributed this to a fall of 1.4% in prices between March and April, compared with a rise of 5.5% during the same period last year.

The ODPM’s figures follow the release of the Halifax’s monthly house price figures last week, which showed a fall of 0.6% in house prices in May.

The mortgage lender said that house prices had remained “broadly unchanged” so far this year, falling by just 0.1% in the first five months of 2005.

As a result, the Halifax predicted a “modest decline” of 2% in house prices across the UK this year.


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