LONDON - Data from the Land Registry shows that property prices in London rose 4.5 percent in the year to September to hit an average of £300,329. This is arguably the strongest growth in the house prices in the capital over the last 12 months.
But the annual rate of house-price inflation fell to 3.52 in the third quarter down from the 5.4 percent in the previous quarter. This was the slowest gain since 1996 and underlines the fact that it is too early to predict better times on the market.
"The main question for policymakers currently is whether the signs of a rebound in more forward-looking housing market indicators will persist in coming months," said Alan Castle, an economist at Lehman Brothers. "Our baseline view is that they will not but we are becoming increasingly concerned about upside risks."
The Monetary Policy Committee is expected to leave the interest rates untouched when it meets on Thursday and analysts say that they do not foresee any more rate cut this year. They are of the view that the next rate cut is set only for February next year. The Land Registry data reinforces the view that the quarter point rate cut in August helped the housing market to a large extent and pushed it form the abyss that it found itself in.
The strongest growth in house prices was in Wales, where prices jumped by 7.4 percent over the last year. Blaenau Gwent and Merthyr Tydfil, with price rises of 28 percent and 27.8 percent respectively recorded the strongest growth in England and Wales. Conversely in Wrekin, Shropshire, prices actually fell by 6.3 percent, thus making it the least desirable property destination.
Commenting on the Land Registry figures, Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors (RICS), said, “RICS expects the upturn in housing activity to be sustained, supported by steady growth in the number of jobs and incomes. However, with further significant interest-rate cuts unlikely in the foreseeable future, a renewed housing market boom is quite unlikely.”
Posted
on : Tue, 08 Nov 2005 18:15 GMT | Mortgages News
By : Rob Davis
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