Archive for March, 2007

The Department for Communities and Local Government (DCLG) has released results of its January house price survey. They show that house prices rose 2.1% in January, bringing the average house price to £205,286.

The annual rate of house price growth was 10.9%, up from 9.9% in December 06. London had a slightly higher rate of growth, up from 11.8% in December to 13.2% in January. London was overshadowed by Northern Ireland however which has an annual house price inflation rate of 42.5%. Experts have suggested that this high growth is due to a peace dividend.

Halifax’s house price survey results for February have shown that prices rose by 1.8% on average. This keeps the annual rate at 9.9%, and brings the ‘standardised average house price’ to £192,233.

On a quarterly basis though, the rate of growth has dropped considerably. In the past three months, prices rose by 2.3%, compared to 4.7% in the previous three months.

Demand is dropping relative to the peaks seen in the autumn of 2006, but low supply is “continuing to exert upward pressure on house prices, particularly in London”.

Halifax also note that property tax as a percentage of total tax has risen from 10.4% in 1995 to 12.0% in 2004. This compares with a 5.3% average in the Euro-zone. What do readers think of this? Is it time for a change in Government? Add a comment to air your views.

The Bank of England has kept the base rate at 5.25% this month. The rate has stayed at this amount for two months now, having last been changed from 5% to 5.25% on 11th January.

This is good news for mortgage holders for the moment, but with inflation still at 2.7%, well above the 2% target, many are expecting a rise to 5.5% in the not too distant future.

The recent fall in share prices would have meant a change in the base rate could have been quite risky this month. If things are a little clearer and more stable next month though, we could see a rise to 5.5%.