Despite house prices across Britain increasing over the last three months, a new study by Nationwide has noted a slowing in the speed of growth.
According to the financial services firm, the typical British property rose in value by 2.1 per cent during the second quarter of 2007, compared to the previous three-month period which witnessed growth of some 2.3 per cent. Now costing an average of 181,810 pounds, house prices across every region of the country were reported to have increased by at least five per cent over the last year, with some five out of 13 regions surveyed recording double-digit growth.
Commenting on the figures, Fionnuala Earley, Nationwide chief economist, said: "As per the first quarter of 2007, Northern Ireland and London led the market during April-June, with annual price growth reaching 54 and 15.7 per cent respectively." However, she added: "Even London and Northern Ireland - the two most buoyant regional markets - saw the quarterly pace of house price inflation slow." Meanwhile, the north-west was said to have seen the lowest growth during the three-month period with prices rising by 5.8 per cent. Yorkshire, the north of England and the West Midlands were also said to have seen "relative weakness" in terms of price growth.
Ms Earley added that Britain's geographical divide "remained significant" between April and June, with homes in the south of the country outstripping the north by 5.6 percentage points. Meanwhile, property in the regions surrounding London were said to be experiencing "some ripple effects" due to the capital's continued price growth.
Research from Nationwide also revealed that while house price increases in Northern Ireland are "astonishing", the economist pointed out that values could be falling as the market peaked earlier this year. Over the last 12 months, prices in the principality were said to have fallen from 54 per cent compared to 57.6 per cent. However, Ms Earley claimed that borrowers in the region could still face difficulties making secured loan repayments as recent rates of growth appear to be "unsustainable". "Average earnings in Northern Ireland are still lower than the UK average, suggesting that affordability is deteriorating fairly rapidly and that the market here could be more vulnerable than in other regions," she claimed.
Across Britain, Belfast, Aberdeen and Sunderland were the three cities outside of London reported to have seen the largest increase in property values, with Newcastle and Birmingham seeing the lowest growth at three per cent each. Meanwhile, Liverpool was the only place in Britain not to witness any increase at all in house prices.
The trend for slowed house price growth noted by Nationwide was also revealed in recent figures from Halifax. According to the Yorkshire-based financial provider, the average house price rose by 0.4 per cent over the course of June. However, with second quarter growth of two per cent, costs were said to be continuing to fall as rises of 4.2 and three per cent were recorded in the last three months of 2006 and the period between January and April respectively
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