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House prices show significant sign of slowing

06 July 2003
The Halifax bank has reported that house prices have risen at their slowest rate since last June.

This shows continued evidence that the once booming housing market is on the sharp decrease.

Last month house prices rose just 0.6 per cent to 21.9 per cent in the latest three months from a year earlier.

Halifax chief economist Martin Ellis said of the development: “House price growth has slowed during the first half of this year compared to the exceptionally strong performance in 2002 and we expect this to continue over the coming months.”

He then added that the company had adjusted its forecast of house price growth for this year to 10 per cent from nine per cent; however the outcome could prove to be even higher than that.

However other information failed to show a significant change in the state of the economy. Indeed, the job market is improving, borrowing is up, as is new car buying.

As a result, few analysts predict a crash of the housing market, and economy as a whole, like the one of the early 1990s when interest rates went into double digits and unemployment surged to over three million.

Interestingly, the Halifax’s figures showed the national housing boom may be somewhat slipping but there continued to be a profound north/south divide. In the second quarter from the first London prices fell 0.9 per cent whilst Northern prices rose 8 per cent on average.