Britain's house prices up 8.1%

UK house prices are showing steady growth, with the value of a typical property rising by 8.1 per cent over the last year to March, according to new figures.

The FT house price index reveals a picture of slowing property price growth however, with the average cost of a home rising by 0.7 per cent last month to £217,076.

Peter Williams, the chairman of Acadametrics, the firm that compiles the index, said that house prices had slowed and flattened out nationally and that other indices seemed to be agreeing with this picture.

However, he noted that in London, annual price growth had accelerated to an average of 12.2 per cent in the last three months, which is potentially good news for buy-to-let investors with property in the city.

"London continues to have a large impact on the national figures but it is a market driven by a wider range of factors than elsewhere," Mr Williams commented.

He stated that without the influence of London, the annual rate of house price growth for the UK would be 6.9 per cent.

A recent report from Knight Frank found that the yearly rate of property value growth in the most desirable prime central London locations reached 32 per cent in March. "Strong momentum" for housing market

The average house price in the UK in February stood at £205,102, according to the latest government figures.

Although this was a fall from the £205,399 seen in January 2007, the annual rate of house price growth rose in February to 12.1 per cent, from 10.9 per cent in January.

The Department for Communities and Local Government said that the small fall in house prices between January and February could be attributed to falls in the average price of bungalows (1.1 per cent), terraced houses and detached houses (both 0.5 per cent).

However, the typical price of a flat rose by 0.9 per cent and semi-detached houses by 0.1 per cent during the same period.

Inflation was at its highest in London, with house prices rising 16.7 per cent over the year to February, to an average of £310,245.

Senior economist at the Royal Institution of Chartered Surveyors David Stubbs said that although the figures showed a fall in house prices, they did not take seasonal swings into account.

He stated: "The market clearly has strong momentum with buoyant economic conditions keeping housing demand high and supply limited, despite the effects of the three interest rate increases since August."



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