House price growth ‘at 12-year low’

Annual house price growth in the UK has slumped to its lowest for 12 years, Halifax claimed on Tuesday.

Its latest survey found prices had dropped 2.5 per cent in March, following a 0.4 per cent fall in February.

Prices in the quarter to March slipped by one per cent, adding weight to fears the market is under severe strain.

Halifax said the average price for a property in the UK is some £191,556.

However, despite the general gloom, across the country there was a mixed picture.

The biggest price rises in the last quarter were in Greater London (1.6 per cent), East Anglia (1.4 per cent) and the East Midlands (2.2 per cent).

There were also gains in the north (1.2 per cent) and Scotland (0.2 per cent). Prices in the south-east were unchanged.

Scotland, 5.3 per cent, and Northern Ireland, 3.5 per cent, have also seen above average growth over the last year.

However, Halifax explains the drop in prices should be taken in context.

Prices have increased by around 171 per cent in the previous decade, from an average of £70,696 to £191,556.

A strong market is also supporting prices.

“Sound economic fundamentals are supporting house prices. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations,” explained Halifax chief economist, Martin Ellis.

“Our research shows that the labour market is the key driver of the housing market. Employment is at a record high and unemployment continues to fall.”