Official house prices figures add to the gloom

UK annual house price inflation in February 2008 was 6.7 per cent, down from 8.0 per cent in January 2008, official figures from Communities and Local Government has said.

Between January and February there was a fall of 1.6 per cent in the prices index of properties bought compared with a smaller fall of 0.4 per cent over the same period last year, resulting in a decrease in the annual inflation rate. The fall in UK prices between January and February 2008 can be attributed to decreases in average prices for flats (2.9 per cent), detached and semi-detached houses (1.5 per cent each), terraced houses (1.1 per cent) and bungalows (0.6 per cent).

All countries in the UK saw decreases in house price inflation in February 2008. In England annual house price inflation fell from 7.9 per cent in January to 6.6 per cent in February; In Wales annual house price inflation fell from 7.4 per cent in January to 3.8 per cent in February; In Scotland annual house price inflation fell from 9.8 per cent in January to 9.7 per cent in February; In Northern Ireland annual house price inflation fell from 8.4 per cent in December to 3.7 per cent in February.

House price inflation fell in seven of the English regions and rose in the other two regions.
The highest annual inflation rate was in London (9.5 percent) followed by the South East (7.5 per cent), and the East (6.5 per cent). Inflation rates were lower in the South West (5.3 per cent), East Midlands (5.1 per cent) and the North West (5.0 per cent). The lowest inflation rates were in Yorkshire and the Humber (4.9 per cent), the West Midlands (4.6 per cent) and the North East (4.5 per cent).

Regional Picture
Mix-adjusted average house prices in February were £225,188 in England, £166,191 in Wales, £162,514 in Scotland and £220,382 in Northern Ireland. The English region with the highest average house price in February remains London at £338,109. The lowest average price was in the North East at £148,636. Of the English regions, only the East, London, South East and the South West had average prices above the UK average.

Types of buyers
The UK house price inflation rate for first time buyers fell from 7.6 per cent in January to 5.9 per cent in February. There was a fall of 1.5 per cent in the prices index between January and February in the properties bought by first time buyers compared with a rise of 0.1 per cent last year resulting in the annual inflation rate falling.
The inflation rate for former owner occupiers fell from 8.2 per cent in January to 6.9 per cent in February. There was a fall of 1.7 per cent in the prices index between January and February in the properties bought by former owner occupiers compared with a smaller fall of 0.5 per cent at the same time last year resulting in a decrease in the annual inflation rate.
The average price paid by first time buyers across the whole of the UK was £160,338 in February, while the average price paid by former owner occupiers was £251,797.