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Last Updated: Wednesday, 8 March 2006, 10:48 GMT
House prices 'still picking up'
A suburban house
The average house in the UK now costs 173,498
House prices are continuing to pick up, according to the latest survey from the Halifax bank.

It says prices rose by 1.4% in February, pushing up the annual rate of house price inflation to 5.5%.

According to the Halifax's calculations, the average property in the UK now costs 173,498.

The bank says further small increases will push the annual rate up in coming months, reversing the slight monthly falls registered a year ago.

Judging by the Halifax's figures, which are based on details taken from its own mortgage lending, house prices have been rising steadily since they dipped to an annual rate of 2.3% in July last year.

Despite this, Martin Ellis, chief economist at the Halifax, predicted that house price inflation would be subdued over the coming year as a whole.

"The continuing high level of house prices in relation to earnings will curb the ability of many potential first-time buyers to enter the market," he said.

"Council tax and utility bills increases of well above inflation in 2006 will also put downward pressure on householders' finances.

"Additionally, the weakening in the labour market should temper housing demand," he added.

Differing views?

Superficially, the latest Halifax report shows a different picture from that of its big mortgage lending rival, the Nationwide building society.

Last week, the Nationwide reported that in February, annual house price inflation slipped back to 3.7%.

But in fact, an examination of its own data also reveals that prices have been on an upward trend since last summer.

Meanwhile, the Halifax estimates that for the first time, council tax and fuel bills together in 2005/06 will cost the average homeowner more than mortgage repayments.

The lender's latest report on the cost of owning and running a home says the typical total outlay rose by 7% in 2004/05, outstripping the rise in the government's consumer prices index by more than three times.


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