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EDITIONS
 Thursday, 9 January, 2003, 08:35 GMT
House price growth 'to slow gently'
Estate agents' boards
First-time buyers are starting to be wary, Halifax says
House prices are more than 26% higher than a year ago, but price growth should slow this year, the Halifax bank has warned.

Halifax, Britain's biggest mortgage lender, predicts house price inflation to slow to 9% by the end of 2003.

The bank's house-price index actually fell slightly in December, but it pointed out that this was due to a statistical adjustment, rather than any genuine softening in the market.

Open in new window : UK property market
The house price boom

Effectively, this adjustment means that the bank overstated house prices slightly during last year.

Buyers hold back

Halifax admitted that first-time buyers were finding it increasingly difficult to get onto the property ladder, the main factor behind the likely slowing of inflation.

But it insisted that the market remained affordable for the majority of customers, with mortgage payments representing just 15% of average earnings for a new buyer.

It also pointed out that expensive London, as expected, was no longer the source of the fastest property-price growth.

In the latest survey, house prices in the Midlands,the South West, Wales and northern England were the fastest growing.

Price tally

Halifax's findings are similar to those from the building society Nationwide earlier this month.

Nationwide suggested house prices had jumped by 25% in 2002 and would see further gains of 10% in 2003.

The building society also suggested London house prices were slipping while other areas of the country, particularly Yorkshire and Humberside, the Midlands and Wales were enjoying stronger growth.

The Bank of England is due to make its latest decision on UK interest rates at 1200 GMT.

Will the UK economy feel the impact of the US slowdown?

Economic indicators

Analysis

UK rate decisions
See also:

05 Jan 03 | Business
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17 Nov 02 | Business
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