House Price Flux

One month house prices are up are a record level, reports in April showed that asking prices rose to £8,000, and the next month, May, asking prices drop by around £900 whilst the monthly house price inflation has seen annual house price growth drop to 13.1 per cent from 15 per cent.

It has also been reported that this year has seen a decrease in property for sale which will help to keep house prices high. Over the last three months, terraces and flats experienced the largest price increases - the most popular property type for first-time buyers. The average asking price of terraces and flats were up £4,000 in the last quarter, whereas detached property prices dropped by almost £5,000.

As of March 2007, the average first time buyer was now looking to pay £157,917 for their first home as house prices rose by £2,000. The average house price is now £206,890, up from £204,556 in February. Another landmark has also been reached with the average price of a home in every town in the UK now above £100,000. Both sets of news will add to the growing concerns of prospective first time buyers that they are being priced out of the market – a recent report showed that 99 per cent of towns are unaffordable for a nurse on a typical salary.

However, buyers looking for mortgages should expect a higher level of interest rates, negative real earning growth, and above-inflation council tax bill increases which may lead to slower house price growth over the coming months, but the ongoing shortage of housing will continue to support house prices.

In the 12 months since last March house prices are up 10.9 per cent. This March the figure stood at 11.8 per cent. Semi-detached properties had the biggest rate of growth from February to March - up 2.2 per cent, followed by terraces (up 1.5 per cent).