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Last Updated: Thursday, 21 June 2007, 16:17 GMT 17:17 UK
House sales matching 1980s boom
Man browsing an estate agent's window
Prices are out of reach for many would-be home buyers
The number of properties being sold in England, Wales and Northern Ireland has reached its highest level since the property boom of the late 1980s.

Figures from HM Revenue and Customs (HMRC) show that 1,859,000 flats, houses and commercial properties were sold in 2006-07.

That was the largest number since 1988, the peak of the last boom before the property crash of the early 1990s.

Both sales and prices in the 2006-07 financial year rose by 11%.

In 1988, the number of homes and commercial properties sold, in just England and Wales, stood at a record level of 2,148,000, before tumbling by more than half a million the following year.

That slump came as interest rates were raised sharply by the government, and house prices fell, leading to negative equity for some mortgage-holders.

Slowdown?

In recent months, there has been growing evidence that the market is starting to slow down, as a consequence of the four increases in interest rates since the summer of 2006.

Graph of Halifax and Nationwide house price indices

Inquiries from new buyers at estate agents have been falling in the past few months, the number of new mortgages approved for house buying has also dipped and the value of new mortgage lending is beginning to slowdown.

This has been reflected in the annual rate of house price inflation, which has, for the time being, levelled off at about 11% a year.

Some commentators believe that even if house price inflation slows further, the buoyancy of the economy and continued immigration will sustain the current demand for new homes.


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