Slowdown in house price growth

11-Apr-2006

Data released by the Office of the Deputy Prime Minister (ODPM) revealed that house price growth did slow down in February, despite a strong start to 2006.

The average price tag of a property in the UK fell from £185,404 the previous month to £183,224, while annual cost inflation also saw a decrease, down from 4.3 per cent to 3.6 per cent.

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Although the reduction in price was only slight, first time buyers looking to get on the first rung of the property ladder will welcome any decrease in costs.

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Howard Archer, chief UK economist at analyst Global Insight, confirmed the findings and predicted the price growth would continue to slow during the whole of 2006, adding that interest rates were likely to stay on hold for some time.

"We remain dubious that house prices will be unable to sustain sharp gains for an extended period, despite the support provided by still relatively high employment and low interest rates," Mr Archer explained.

Flats saw their value drop by 4.6 per cent compared to January, while detached houses fell 1.2 per cent and bungalows 1.1 per cent.

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