'Annual house price inflation climbs to 11.1%'

House prices rose by one per cent in March, according to the latest figures from Halifax.

Although this was the smallest monthly increase that the firm had recorded since August 2006, it meant that the annual rate of house price inflation climbed to 11.1 per cent.

All of the UK regions saw rises in the value of a typical property in the first quarter of 2007, with Scotland seeing the biggest increases of 7.5 per cent, followed by the south-west (5.4 per cent) and Wales (4.9 per cent).

Halifax group economist Tim Crawford commented: "Prices continue to rise in a tight market but there are emerging signs that pressure on householders' finances - partly due to the rise in interest rates since last summer - are dampening housing demand with evidence of reduced market activity."

While interest rate rises, negative real earnings growth and above-inflation council tax bill increases would lead to slower house price growth, sound economic fundamentals and an ongoing shortage of property would continue to support prices, he added.

A shortage of property for sale in relation to demand was credited for there being eight buyers for every seller in the UK property market in February, according to estate agent Hamptons International.

Landlord Mortgages “The Halifax House Price Index has historically been reliable but has recently been overshadowed by the new Land Registry House Price Index. It is important to review both types of House Price Indices prior to making any decision based on property prices.”



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