House prices continue to spiral

02 April 2004
The UK housing boom continues, with little sign of a slow down, new figures from the Halifax suggest.

A new survey by the bank found that prices jumped by 2.2 per cent in March, following a 1.6 per cent rise in February. House prices last month were 18.5 per cent up on a year ago and the price of the average house rose to £151,467.

Northern England and Wales saw the fastest price rises during the first quarter of 2004, with increases of 9.7 per cent recorded in the north-west, 9.4 per cent in the north, and 8.3 per cent in Wales.

Meanwhile, the south saw the smallest price rises at just over half the national average. Prices in London rose by just 9.1 per cent over the last year.

Martin Ellis, chief economist at Halifax, commented: "Prices are rising in the south, but have done so at a much more modest pace over the past year. This has led to a narrowing in the north/south divide and we expect this trend to continue during the remainder of 2004 as prices again rise more quickly in the north."

Halifax predicted that prices would slow down towards the end of the year, but there would be no crash in the housing market, as interest rates, unemployment and mortgage repayments, remained relatively low.

"We don't see anything that would cause prices to fall," Mr Ellis said. "It would take a very sharp rise in interest rates, a turnaround in the economy or a big rise in unemployment to cause that and we don't see that as a realistic scenario."