Annual house prices fall by 1.3%

Vicky Shaw
Tuesday 11 October 2011 15:36 BST
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House prices in August fell by 1.3% on a year ago
House prices in August fell by 1.3% on a year ago (AFP/ getty Images)

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Government figures today showed that house prices in August fell by 1.3% on a year ago - the fifth month in a row to show a year-on-year drop.

The Department for Communities and Local Government reported an average sale price of £208,476, a figure which has not been seasonally adjusted.

But the Government data also revealed that on a monthly basis prices went up by 0.6% over July - a sharper rise than the 0.4% increase in August last year and 0.3% the previous month.

The monthly figures showed August enjoyed the largest price rise since March, when there was a 1.1% increase.

Howard Archer, chief UK and European economist at IHS Global Insight, described the 0.6% rise in August as an "upward surprise".

But he said the data "does not change our view that house prices are likely to fall by 5% through to mid-2012".

He pointed out that August is normally a strong month for housing market activity.

The 1.3% drop seen over the year is not as sharp as the dip felt in July, when prices fell by 1.5% over 12 months.

Average prices decreased during the year to August in all UK countries, by 1.2% in England to an average £216,196, 0.3% in Wales to £149,807, and 1.5% in Scotland to £163,790, while the sharpest drop was felt by Northern Ireland, which saw a 4.3% tumble to £144,163.

In the English regions, the North East saw the sharpest price fall over the year to August, experiencing a 4.8% drop, while London registered an annual 3.2% rise.

Prices paid by first-time buyers were £153,158, 1.8% lower on average than a year earlier and those paid by former owner occupiers also decreased by 1.1% to £242,579.

New properties were 9.2% more expensive on average than a year earlier, typically £198,687, while prices for pre-owned houses decreased by 2% to £209,249.

PA

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