The buoyant property mood continues

In the post-Christmas period, a heap of figures can be hard to digest. But the buoyant mood of the property market in 2006 means that the appetite for house-price statistics is keener than usual. So let’s list a few key numbers and some forecasts for the New Year.

Prepare for a deep sense of calorie-free gratification if you own a house in London and the South East and hotspots such as Northern Ireland. But be aware that the party is forecast not to continue in 2007: most pundits are predicting a slowdown — except in the smartest part of London, which this year became a state within a state, governed by its own set of property acquisition rules.

The average house price nationwide now stands at £172,185 ... or £187,995 ... or £198,987, according to just three of the major sources of housing data.

The differences between these figures can be accounted for by the different bases of calculation: for example, Halifax’s average price of £187,995 is seasonally adjusted; the Department for Communities and Local Government’s figure of £198,887 is not.

But all these figures have something in common: they are 7 to 10 per cent higher than a year ago. This is despite two interest rates rises last year and speculation that there may be two increases in 2007.

Nationwide’s average price of an average UK home increased to £173,746, up from November's £172,185. The Nationwide’s survey showed that the price of a typical house increased by the equivalent of £45 per day in 2006 - three-and-a-half times faster than the £12.50 per day in 2005.

The fierce competition between mortgage lenders has been one of the major reasons for the country’s apparent resilience to rising rates.

The Royal Institution of Chartered Surveyors does not provide an average house price figure, but it says that prices are now 120 per cent above their level in 1996.

All the average house prices are skewed by the performance of the London and South East markets in the past year, driven upwards by a scarcity of supply and seemingly insatiable demand. The pace of advance will be more measured in 2007, according to most commentators.

Your home may be repossessed if you do not keep up repayments on your mortgage.
Article date: 12.06