Government figures related to the house prices were published today and have shown that house prices continued to be on a freefall and that the annual price inflation dropped by 50 percent from March.
The figures for the month of April show a 0.8 percent fall in house prices as buyers declined to pay the high sums asked by the sellers of detached properties. The Office of the Deputy Prime Minister (ODPM) said that the average price of a UK property was £181,832 in April as compared to £183,346 in March. Annual house price inflation across the UK was 6.9% in April, down from the 12.6% in March. Upto April 2005, annual house price inflation across the UK was 9.9 percent.
This fall has been attributed mainly to a fall in the price of detached houses. The average price for a detached house fell by 3.5 percent in April as compared to March. Analysts point out that the early Easter this year could also be a contributory factor in the fall of the house prices.
Traditionally, the Easter break always sees a rise in prices. Since this break fell in March, there was good movement around that time and then a fall in the next month. Last year, the Easter break fell around a month later and hence prices rose by 4.5 percent between March and April.
However, there was good news for first time buyers as the price rise in this sector slowed down to a trickle. Between March and April, the prices for first homes rose by just 0.5 percent as compared to an 8.2 percent rise in the same period last year.
Reacting to these figures, Howard Archer, chief UK economist at consultancy, Global Insight said, "The sharp fall in annual house price inflation to 6.9% in April from 12.6% in March, reported by the ODPM may well add to fears that the housing market could yet suffer a sharp correction. However, it is in reality bringing the annual house price inflation rate more in line with that reported by the Nationwide and Halifax. We continue to believe that the housing market will avoid a sharp correction, although we acknowledge that the risk of this happening would increase significantly if the economy slows markedly for an extended period and unemployment starts to rise significantly. Instead, we forecast that there will be an extended period of relatively subdued housing market activity and soft prices."
Posted
on : Wed, 15 Jun 2005 15:25 GMT | Mortgages News
By : Anne Philips
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