Print friendly version 9 Jan 2008

House prices rise in December

House prices rose by 1.3% in December 2007 following three successive monthly falls, Halifax’s latest index has shown.

According to the Halfax House Price Index, the annual rise in house prices was 5.2% in December, meaning 2007 was only the second year since 2001 in which prices have risen by less than the long-term average of 8%. A typical house in the UK is now valued at £197,039, £11,759 more expensive than in December 2006.

Although house prices have risen by 182% over the past 10 years, bringing the average price from £70,000 to nearly £197,039, Halifax predicts house prices will remain flat in 2008, as a slowdown in the housing market begins to take effect.

Martin Ellis, chief economist at Halifax, said: “Overall, the housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter. Higher mortgage repayments – in response to the series of five interest rate increases between August 2006 and July 2007 and falling real earnings – have put pressure on households' income, resulting in a slowdown in both house price growth and activity in recent months. Sound economic fundamentals and lower interest rates, however, will support house prices in 2008.”



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