Slowdown for property market

A WIDELY-REPORTED slowdown in the property market was reflected in official Government figures today. Annual house prices inflation was 12.6% in England and Wales in October, down from 13.8% the previous month, according to the Office of the Deputy Prime Minister.

There was also more evidence that young buyers are being priced out of the market. The average price of a home bought by first-time buyers was up 12.5% compared to 15.6% the month before.

However, London, which tends to lead trends in UK housing, bucked the trend with annual gains increasing from 6.6% to 7%. The average price actually rose 0.7% to ?180,444 between September and October. The ODPM says the figure is not seasonally adjusted and can therefore be misleading.

Annual price gains in England were 11.9% compared to 12.9% before. The slowdown was sharpest in Scotland, where inflation fell from 21.9% to 17.8% while the figure slipped to 23.2% from 25.5%.

Regionally, only London and the West Midlands saw the market pick-up. But the most buoyant English areas were again in the north. The North East (23%), the North West (20.3%) and Yorkshire and the Humber (19.6%).

Evidence has been growing in recent months that the house price boom is finally over and that values may even be declining.

Property research firm Hometrack says prices have been falling for five months, while Halifax, the UK's largest mortgage lender, said house prices fell 1.1% in October, the sharpest monthly decline in four years, and 0.4% in November.

It is predicting a 2% fall in house prices for 2005. Rival lenders Bradford & Bingley and Nationwide expect a 2% increase next year.