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Wednesday, May 26, 1999 Published at 05:53 GMT 06:53 UK

Business: The Economy

House prices rise but sales fall

London is still the priciest place to buy a house

Russell Hayes: "Low interest rates are pushing up house prices"
Average house prices in England and Wales are rising much faster than inflation - but they were static in parts of northern England.

Official figures from the Land Registry show that the average price of property sold in the first three months of this year was 6.6% higher than a year earlier.

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However the number of houses sold in the first quarter fell sharply by 19.4% - reflecting the typical slowdown in house buying in the months immediately after the New Year.

The Land Registry collects details of all purchases of houses and flats in England and Wales.

This makes it the most authoritative guide to what is happening in the property market.

Between January and March the average price of a property was £85,000.

Regional differences

But this average masks large regional differences.

House prices in London were up nearly 9% compared with no increase at all in Yorkshire and Humberside.

The rise in house prices is not particularly high by historic standards - but it comes when the economy has ground to a halt and when general prices are rising at only a third of that rate.

This will worry the Bank of England because it shows it has not been able to contain house prices even though it has a firm grip on inflation.

If house prices continue to rise sharply - another house price boom and bust cycle is possible.

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