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House prices 'rose 9.9% in 2006' House prices 'rose 9.9% in 2006'
(about 2 hours later)
House prices across the UK rose by an average of 9.9% in the course of 2006, according to the Halifax bank.House prices across the UK rose by an average of 9.9% in the course of 2006, according to the Halifax bank.
The report from the country's biggest mortgage lender confirms the view that property price inflation accelerated last year.The report from the country's biggest mortgage lender confirms the view that property price inflation accelerated last year.
The biggest increases were in Northern Ireland where prices rose by 53%.The biggest increases were in Northern Ireland where prices rose by 53%.
During December, the average UK price dropped by 1%, to £186,035, but the Halifax said it was to early to suggest prices were now about to cool off. During December the average UK price fell 1% to £186,035, but the Halifax said that did not necessarily mean the market was cooling.
"It remains too early to conclude that this indicates a genuine slowdown in the housing market," said the Halifax's chief economist Martin Ellis."It remains too early to conclude that this indicates a genuine slowdown in the housing market," said the Halifax's chief economist Martin Ellis.
"Overall, prices in the final quarter of 2006 were 4.2% higher than in the previous quarter, marking the strongest quarterly rise since 2004 Q2," he pointed out."Overall, prices in the final quarter of 2006 were 4.2% higher than in the previous quarter, marking the strongest quarterly rise since 2004 Q2," he pointed out.
Industry predictionsIndustry predictions
The report from the Halifax chimes with that of many other industry experts.The report from the Halifax chimes with that of many other industry experts.
Last week the Nationwide building society put house price inflation for 2006 at 10.5%.Last week the Nationwide building society put house price inflation for 2006 at 10.5%.
As with the Halifax, its survey was based on a sample of its own lending to customers and the prices they pay for houses and other residential properties.As with the Halifax, its survey was based on a sample of its own lending to customers and the prices they pay for houses and other residential properties.
The brisk pick up in house price inflation last year confounded the expectations of many market commentators who had predicted that price rises would be much more subdued.The brisk pick up in house price inflation last year confounded the expectations of many market commentators who had predicted that price rises would be much more subdued.
In line with many others, the Halifax is now expecting something of a slowdown, partly thanks to the two recent increases in interest rates and the prospect of more to come.In line with many others, the Halifax is now expecting something of a slowdown, partly thanks to the two recent increases in interest rates and the prospect of more to come.
"Continued economic growth, rising employment and an ongoing lack of supply will continue to drive up house prices over the coming months," said Mr Ellis."Continued economic growth, rising employment and an ongoing lack of supply will continue to drive up house prices over the coming months," said Mr Ellis.
"Higher interest rates, greater pressure on household finances and subdued real earnings growth will, however, constrain housing demand. We expect house prices to increase by 4% in 2007.""Higher interest rates, greater pressure on household finances and subdued real earnings growth will, however, constrain housing demand. We expect house prices to increase by 4% in 2007."