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UK House Prices Situation at 20 4 2007: Prices remain strong, especially in London/south-east.
UK House Prices Forecast: Continued growth in most competitive areas, stable prices elsewhere.
House Price Inflation
March has seen a raft of banks, building societies and other organisations that publish house prices all update their HPI (House Price Inflation) indexes. They all show a determined upwards trend, but don't all agree – as we've seen before, each index uses a slightly different set of data to calculate HPI, and the resulting differences can be quite large.
1. Property website Rightmove leads the way with a 1.5 per cent month-on-month increase in house prices for March, pushing the year-on-year average to 12.2 per cent.
2. Just slightly behind is Halifax, with their HPI index showing a 1 per cent monthly increase for March, taking the yearly average to 11.1 per cent. Halifax group economist Tim Crawford commented that there are "emerging signs" that financial pressures on householders are "dampening housing demand".
3. Nationwide's March HPI figures show a 0.4 per cent month-on-month interest, which leaves their year-on-year rate of increase to 9.3 per cent.
4. The Land Registry index is always interesting, as unlike other indices it is based on the actual sale prices of every property sold in the England and Wales, and includes properties sold in cash sales. The most recent Land Registry figures are for February, and show a year-on-year increase of 8.5 per cent – just behind Nationwide's figure.
5. The most conservative HPI comes from property valuation site Hometrack. Their index shows a 0.8 per cent month-on-month increase for March, providing an annual rate of increase of 6.7 per cent.
Despite the wide variation in these figures, they all show continued growth in UK average house prices. Most analysis shows that this growth is primarily being driven by rising prices in London, the south-east and Northern Ireland, but the market as a whole remains healthy.
RICS: Upturn In Price Growth?
March saw a small upturn in the number of chartered surveyors reporting increased prices, according to the surveyors' trade body, RICS. According to their latest figures, 25.5 per cent more surveyors reported and increase in prices in March than a fall.
This represents a small increase from February, when the figure was only 24.8 per cent. Perhaps more significantly, it is the first time for five months that this figure has risen, albeit only slightly.
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