HOUSE prices in Britain rose by 0.7 per cent in May on the previous month, pushing the annual increase up to 11 per cent, the Department for Communities and Local Government (DCLG) said yesterday.
Consequently, the mix-adjusted average house price in the UK stood at £209,505 in May 2010. Annual average house prices paid by first time buyers in May were 11.6 per cent higher than a year ago. Average house prices paid by former owner-occupiers were 10.8 per cent higher.
The DCLG data appears to jar with a string of less encouraging data for the UK housing market, but it needs to be borne in mind that the DCLG provides lagging evidence on house prices as the office calculates its index at the time when mortgages are completed, said IHS Global Insight’s Howard Archer.
Halifax reported that prices fell by 0.6 per cent month-on-month in June while Nationwide said that the rise slowed to just 0.1 per cent last month.
While London has been at the forefront of the boom in property prices, Findaproperty.com said that a surge in supply drove down house prices in the capital in June. According to the property website’s House Prices and Affordability Index, London suffered its most dramatic fall since June 2008, thanks to stock levels rising 7 per cent. This pushed asking prices down by 1.1 per cent to £435,110.
Nigel Lewis, property analyst at FindaProperty.com, said: “It is reverting to a buyer’s market in the capital and sellers will need to be competitive with their pricing if they want their property to stand out among the crowds.” He added that the growth in London prices was never going to have been sustainable.