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DCLG reveals house price growth

13 September 2006
A new report from the Department for Communities and Local Government (DCLG) shows house price growth at its highest level in over a year.

The figures for July, before the Bank of England increased interest rates, show price inflation of 6.0 per cent in the year to July, up from 5.3 per cent in June.

Yorkshire and Humber showed the highest growth of 8.4 per cent, edging out London's 7.1 per cent, despite the capital having already enjoyed several years of consistently strong growth.

"The acceleration in house price inflation reported by the DCLG for July to a 14 month high confirms that the property market enjoyed a firm rebound during the summer months," Milan Khatri, a spokesperson for the Royal Institution of Chartered Surveyors (Rics) commented.

"House price rises for first-time buyer properties fell back in July but at 5.6 per cent is still running above average wage rises, increasing difficulties for would-be buyers to get on to the housing ladder," he added.

Analysts believe that house price growth should cool as mortgage rates increase in line with the Bank of England's base rate.

A further rise later in the year, which many economists believe is most likely in November, would likely see property demand further weakened as the cost of lending increases.

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