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Last Updated: Monday, 15 January 2007, 11:21 GMT
Average home cost 'near 200,000'
Newry, N. Ireland
Northern Ireland has seen huge price increases
House prices in the UK accelerated towards the end of last year, according to the Department for Communities and Local Government (DCLG).

It says average prices were rising by 8.9% a year in November, up from 8.6% in October, a finding in line with other recent surveys.

The increase took the average property price in the UK to 199,467.

House prices have been rising fastest in Northern Ireland where they went up by 36.6% in the 12 months to November.

Rate rise

The acceleration of house prices in the past year means that the value of all the UK's homes has now reached 3.8 trillion, according to the Halifax bank.

It says the value of the UK's total stock of residential property rose by 12% in 2006, adding 410bn to the total.

UK HOUSE PRICE INFLATION (NOVEMBER 2006)
UK 8.9%
England 8%
Wales 10.5%
Scotland 13.4%
N.Ireland 36.6%
North East 6.4%
North West 8.7%
Yorks & Humberside 10.3%
East Midlands 5.2%
West Midlands 7%
East 6.4%
London 10.1%
South East 7.2%
South West 8%

Source:DCLG

This means that the value of UK homes is 3.5 times greater than the mortgages that are still outstanding.

Analysts believe that the strength of the housing market was one factor behind last week's surprise rise in UK interest rates to 5.25%.

While noting that the DCLG figures lag behind other housing surveys, Howard Archer, an economist at Global Insight, said that if house prices continue to rise sharply in the coming months, "it will increase the chances of interest rates rising even higher".

Around the regions

Property inflation rose in England, Wales and Northern Ireland but fell slightly in Scotland.

Within England prices accelerated in four regions (North West, Yorkshire & Humberside, West Midlands and the South East) but fell back in the other five (North East, East Midlands, East, London and the South West).

Contrary to some claims, first-time buyers are not facing a higher rate of inflation than repeat buyers.

For first timers the cost of the homes they bought was 8.8% higher than the year before, but for former owner occupiers the inflation rate was slightly higher at 9%.

The DCLG index is based on a sample of about 50,000 completed sales each month, drawn from data from about 50 mortgage lenders.


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