Thursday, May 6 2004

The UK’s biggest mortgage lender, the Halifax found prices rose by 1.8% in April, bringing annual house price inflation to 19.1%. This puts their average UK house price at £154,304.

The report says that sound fundamentals are underpinning the housing market at present, and although rises are continuing in the face of speculation about a crash, a slowdown rather than a dramatic fall is still what experts predict.

The economy is growing at a healthy pace, Halifax says, resulting in record levels of employment. Interest rates are historically low, even taking into account a probable rise later today to be announced by the Bank of England.

Martin Ellis, Chief Economist for the lender, said: ‘House prices increased by 1.8% in April, in line with the average rise during the preceding four months, and confirming the continuing strength of the housing market.

‘The fundamentals will remain supportive during the remainder of 2004 with little prospect of either a turnaround in the labour market or a sharp rise in interest rates.’

He went on to say that further rises in interest rates and increasing difficulties faced by first-time buyers will mean house price inflation should ease during the second half of the year, echoing comments by Nationwide last week, which also said it expects a slowdown to occur after the summer.