House prices in the regions kicked off 2006 in style, with an average increase of 1.3% in January. Latest data from the Office of the Deputy Prime Minister (ODPM) shows that annual growth was positive in every region for the first time since last July.
Prices in London, Northern Ireland and the East and South East grew by at least 2% month on month in January, marking the first annual gains in four months for the East and South East. The highest house price inflation rates in England were in the north, where Yorkshire and the Humber saw rises of 9.3%, while prices in the south-west rose by just 0.7%. London remains the region with the highest average house price, with properties fetching £273,973. The lowest average was in the north-east, where houses sell for an average of £135,715. Accordingly, the ODPM noted annual house price growth at the national level increasing to its fastest pace in six months.
But although the regional picture of house prices improved in January, the ODPM is not convinced the upturn will be sustained. Stretched affordability and subdued activity in the wider economy will limit the scope for a prolonged upturn in house price growth in 2006, according to the report.
These figures are in line with other recent indicators that paint an optimistic picture. Although the report is based on the number of competed sales during the month of January and thus cannot be directly compared with indicators based on asking prices or mortgage approvals, the ODPM data backs up the Royal Institute of Chartered Surveyors? February report, showing that the number of completed sales in January were up 15% on the previous year. In January, the Nationwide also found the market buoyant, with houses prices increasing at the fastest pace in 18 months.
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