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House price inflation slows

10 November 2003
According to the latest official figures, house price growth in England and Wales slowed towards the end of the summer.

Figures from the Land Registry showed that between July and September 2003 house prices in England and Wales increased by 10.62 per cent.

This is a fall compared to the 12.52 per cent increase recorded in the second quarter of 2003 and the 19.7 per cent recorded in the first quarter of 2003.

The Government's figures also showed that the volume of sales decreased by 11.44 per cent from 328,184 in the third quarter of 2002 to 290,637 for the same period in 2003.

Concerns about the racing housing market fuelling increasing levels of consumer debt prompted the Bank of England's Monetary Policy Committee to raise interest rates by 0.25 per cent last week.

However, the Government's figures show that house price inflation and the quantity of sales have slowed. Despite the cooling market, house prices in all regions of England and Wales recorded rises in average price.

The average house price in England and Wales now stands at £161,665. The strongest growth was recorded in the North where prices went up by an average of 24.36 per cent.

In contrast the average house in Greater London increased by 5.4 per cent to £262,044 in the third quarter of 2003 when compared to the same period a year ago. The volume of property sales in the capital fell by 17.76 per cent from 44,202 in 2002 to 36,353 for the same period in 2003.

The Government's figures reflect last week's findings by the Halifax and Nationwide. Both saw strong house price growth during the last month and both saw declining number of transactions.

However, both banks' survey's revealed that the number of first time buyers entering the markets decreased and current homeowners were willing to take on increasing levels of debt to fund their property buys.