Government Figures Show Slowing House Prices

Official Government figures show that house price inflation fell to its lowest for more than a year in November, with the cost of an average home falling by £1,750.

The figures from the Department of Communities and Local Government show that house prices fell by 0.8% in November, meaning that annual house price inflation was down to 9.5% in the year to November.

The average home in the UK was worth £218,330, with a 2.4% fall in the price of detached houses and a 0.9% drop in the cost of a bungalow.

Most house price indexes showed a fall for November, although the DCLG figures are published later than the others. Halifax saw a fall of 1.3%, and Nationwide a drop of 0.8% in November.

The figures back up other evidence that the housing market is in a period of slowdown.

The DCLG reported that the average price of a property for a first-time buyer was £165,230 in November, 0.9% down on October, but well above (£40,000) the threshold for 1% stamp duty. Home movers paid an average of £244,380 for house, 0.8% less than in October, and just £5,600 below the 3% stamp duty thresholds at £250,000.

Despite the overall fall, there were four regions that had an increase in annual house price inflation in November. The North East saw the biggest rise, up from to 5.2% to October, to 7.6% in the year to November. There were modest rises in Scotland, East Midlands and the East.

After an amazing first half of the year, Northern Ireland continued to see its house price inflation cool, down to 17.6% in the year to November. In the month Northern Ireland saw its average house price fall from £241,159 to £225,890. London’s annual growth slowed from 17.7% to 14.1%.

Chief UK economist at analysts Global Insight, Howard Archer, said: “Even though the DCLG tends to provide lagging evidence on house prices as the office calculates its index at the time when mortgages are completed, the data strongly reinforce the overall evidence that the housing market lost significant momentum in the latter months of 2007.