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| House prices 'slowest since 2005' | |
| (20 minutes later) | |
| House prices in the UK grew last year at their slowest rate since 2005, according to the Halifax bank. | |
| The country's biggest mortgage lender said prices rose by 5.2% in 2007, taking the value of the average UK home to £197,039. | The country's biggest mortgage lender said prices rose by 5.2% in 2007, taking the value of the average UK home to £197,039. |
| Prices went up by 1.3% in December, the Halifax said, the first time there has been a rise in the past four months. | Prices went up by 1.3% in December, the Halifax said, the first time there has been a rise in the past four months. |
| But overall the market has been going through a sharp slowdown under the impact of higher interest rates. | But overall the market has been going through a sharp slowdown under the impact of higher interest rates. |
| "This mixed pattern of monthly price rises and falls is a typical characteristic of a subdued market," said Martin Ellis, chief economist at the Halifax. | "This mixed pattern of monthly price rises and falls is a typical characteristic of a subdued market," said Martin Ellis, chief economist at the Halifax. |
| "Overall, the housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter," he added. | "Overall, the housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter," he added. |
| Unaffordable | Unaffordable |
| The lender predicts that house prices will slow down even more this coming year. | The lender predicts that house prices will slow down even more this coming year. |
| It expects them to be flat over the course of 2008, and expects the Bank of England will cut interest rates twice in the next 12 months in response to the slowdown in the wider economy. | It expects them to be flat over the course of 2008, and expects the Bank of England will cut interest rates twice in the next 12 months in response to the slowdown in the wider economy. |
| Even though the Bank cut interest rates in December, the housing market has been responding to a series of previous rate rises that started in the summer of 2006. | Even though the Bank cut interest rates in December, the housing market has been responding to a series of previous rate rises that started in the summer of 2006. |
| These, combined with the fact that houses are becoming increasingly unaffordable for many buyers, have started to choke off demand in the market by keeping out many potential first time buyers. | |
| The Halifax recently reported that there were just 300,000 first-time buyers last year, the lowest level since 1980. | The Halifax recently reported that there were just 300,000 first-time buyers last year, the lowest level since 1980. |