UK house price inflation fell from 12.4% in July to 11.4% in August, says the latest house price report from the Department of Communities and Local Government, resulting in a 0.5% rise, as opposed to a larger rise of 1.4% over the same period last year.
Regionally, the highest rate of house price inflation was in London, the report says, followed by the South East and the South West, and the lowest rises were in Yorkshire and the Humber, the North East and the West Midlands.
The average house price nationally now stands at £219,528, although in London this figure is considerably higher, at £339.569.
Seema Shah from Capital Economics said these figures are just a prelude to a definite slowdown: ‘Today’s data showed that house price growth slowed in August, but still remains in double digits. With the impact of weak buyer enquiries and mortgage demand now showing through in indices which measure house prices at earlier stages of the home buying process, it is just a matter of time before CLG house price data (which measure completion prices) follow suit.
‘Once the dust from the HIPS episode settles, we expect the weaker fundamentals of lower buyer enquiries and mortgage demand to reassert themselves in all house price data. We expect house prices to fall by 3% in 2008.’