House price rise shows no sign of slowing

08 March 2004
Britain's housing boom continues as annual prices inflation reached 9.7 per cent in January, according to new government figures.

The Office of the Deputy Prime Minister (ODPM) statistics show that annual prices inflation was up from 8.3 per cent in December 2003, returning to the rate recorded in November.

The housing market appears to be showing a fresh burst of energy, contrary to analysts' predictions of a cooling down period.

The ODPM's index is designed to clarify any discrepancies between other data. The average house price in the UK rose from £162,654 in December to £163,645 in January this year. The fastest price rises were seen in Scotland and in the northern regions of England.

Meanwhile, inflation for first-time buyers soared to 12.1 per cent in January, up from six per cent the previous month.

Recent data from mortgage lenders also shows that the housing boom shows little sign of abating. However, the government's figures show that house prices are rising at a much slower rate than recent surveys showed. Surveys from the Halifax and Nationwide found that annual property price inflation rose to between 17-18 per cent in February.

The Bank of England has raised interest rates half a per cent to four per cent over the past few months in a bid to cool down house prices.