Price inflation reaches 5.7 per cent says Hometrack

Posted: 28 Dec 2006 11:21:36 GMT

House price inflation has reached an annual rate of 5.7 per cent, the highest seen since June 2003, figures from Hometrack have revealed

House price inflation has reached an annual rate of 5.7 per cent, the highest seen since June 2003, figures from Hometrack have revealed.

Property price growth slowed to 0.3 per cent in December from 0.6 per cent in November but remained above the levels seen in the same month of 2005, it added.

The growth was led by London, where property prices have grown 12.1 per cent during 2006, more than twice the rate seen anywhere else in the country.

In contrast, prices in the midlands have risen by less than one percentage point over the course of the year.

"The big story of 2006 has been the bounce-back in London prices after the under-performance of values between 2001 and 2005," said Richard Donnell of Hometrack.

Given that growth has remained high despite two recent interest rate rises, Hometrack said that the property market is unlikely to significantly slow during 2007.

"In the absence of any external shocks to knock market sentiment, the demand for housing in 2007 will continue to be influenced by short-term expectations over interest rates and the prospects for future house price growth," said Mr Donnell.

Hometrack said that growth was likely to reach around four per cent over the course of the year.


© Houseladder Ltd