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Last Updated: Thursday, 27 April 2006, 07:56 GMT 08:56 UK
Growth in UK house prices 'cools'
Front door keys
Demand for properties remains strong
UK house price growth "cooled sharply" in April, according to the latest survey from the Nationwide.

Prices rose by just 0.1% in April, against a 1.1% increase a month ago, and annual house price inflation fell to 4.8% in April from 5.3% in March.

Prices in the three months to April rose by 1.8% compared with the previous quarter, down from 2.1% in March.

However, the Nationwide said that the market remained "reasonably healthy" with demand for homes still strong.

The underlying picture remains reasonably healthy as demand conditions have remained quite firm
Fionnuala Earley, Nationwide

According to the Nationwide, the average UK house price is now 163,573, nearly 7,500 more than at this time last year.

Slowdown 'not unexpected'

"The cooling in prices in April was not unexpected given the surge in March," said Nationwide's group economist Fionnuala Earley.

"However, the underlying picture remains reasonably healthy as demand conditions have remained quite firm."

In February there was a fall in the number of new mortgages approved by UK lenders, down from 121,000 in January to 115,000.

But the Nationwide pointed out that this was still above the average level seen during the last ten years, of 100,000 per month.

Looking ahead, the Nationwide said that higher petrol prices and utility bills, together with rising unemployment, could hit consumer confidence as the year progresses.

"All in all we think this adds up to a mildly weakening, rather than accelerating, profile for house price growth for the rest of the year," Ms Earley said.

According to the Council of Mortgage Lenders (CML) total Uk mortgage debt is set to top 1 trillion during the next few weeks.

But the CML added that the debt was dwarfed by the value of property.

Latest estimates put the value of the UK's housing stock at about 3.6 trillion.

First time buyers

Meanwhile, another mortgage lender, the Bradford & Bingley, has highlighted the extent to which first-time buyers rely on their parents for help in buying their first property.

Its survey suggests that four out of ten get parental help, with half of those parents giving their children cash to put down as a deposit when buying their homes.

Among the other ways of helping their offspring financially, 15% contributed to the monthly mortgage repayments, while 10% bought the properties jointly with their children.

The cost of a first-time house purchase hasn't simply been unloaded onto parents who are generally better off than their children..

The Bradford & Bingley says that 10% of first-time buyers now take another job to raise money, while a quarter of them work an average of nine and a half hours overtime a week.


BBC NEWS: VIDEO AND AUDIO
A first-time buyer's problems of getting on property ladder



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