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EDITIONS
Monday, 9 September, 2002, 18:06 GMT 19:06 UK
UK shines more light on house prices
For Sale signs
At least two thirds of UK families own their homes
The British government is to produce a monthly house price survey.

Recent surveys by some of Britain's main mortgage lenders have given conflicting readings of whether house price inflation is speeding up or slowing down.

Soaring house prices, especially in south east England, have raised concerns about a repeat of the price crash of the early 90s, when many people found their homes were worth less than they had paid for them.

A spokesman for the Office of the Deputy Prime Minister (ODPM) said the new index would be launched early next year.

Blurred picture

"We already do a quarterly house price index. But we have always thought that there is a need for a monthly index," said Gavin McGuire, a spokesman for the OPDM.

The new, official survey will be compiled from a mix of housing industry sources, including the Council of Mortgage Lenders (CML) and the Land Registry Department.

Mr McGuire denied that the plan for a new survey was hatched in response to conflicting data from financial services firms.

"It's not quite like that. We don't want the market to read too much into this," he said.

The Halifax, Britain's biggest mortgage lender, found house price inflation "gradually eased" during June, July and August.

Its August survey found house prices rose that month rose at an annualised rate of 18.8%, slackening from 20.8% in July.

But the Nationwide Building Society reported house prices jumped 2.5% in August from July.

Hot topic

House prices have long been viewed by economists as a key measure of consumer well-being.

However, they have become an increasing focus of public attention as first time buyers have found themselves priced out of the market in many parts of the country.

Meanwhile, many small investors have turned to buying second homes for rental to top up savings threatened by falling stock markets.

About two-thirds of families own their own homes.

Uncertainty

Analysts have welcomed the decision to produce an official index..

The uncertainty generated by conflicting findings of surveys by individual banks and building societies was highlighted by Danny Gabay, an economist at investment bank JP Morgan.

He said: "At the moment, UK house prices could be rising at an accelerating pace, having been decelerating since January or have recently started to slow."

"A widely accepted official measure would greatly aid analysis of the housing market."


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