Nationwide reports that prices have increased by 2.3 per cent since the fourth quarter of 2005, which represents the fastest quarterly increase since the third quarter of 2004. The annual rate of inflation is 4.9 per cent, according to Nationwide and house prices in London have outpaced the UK for the first time in four years.
Fionnuala Earley, Nationwides group economist, said: The annual rate of house price growth increased in all of the UK regions in the first quarter, but the fastest growth was in Northern Ireland, where prices rose by 17.6 per cent more than three and a half times faster than the UK average. The slowest growth was in the Northern region, where prices increased by 0.5 per cent to £123,483 only about a tenth of the UK rate.
Halifaxs house price index shows a strengthening of house prices with an rate of annual inflation at 6.2 per cent.
But its index shows that the annual rate of house price inflation has slowed in all the regions of Britain over the past 12 months, with the exception of greater London where the increase in the past year of 7.2 per cent out strips the gain in the preceding 12 months of 1.1 per cent.
Commenting on the figures, Martin Ellis, chief economist, said: House prices increased by 0.9 per cent in March and by 1.6 per cent in the first quarter of 2006, with the average house price breaking the £175,000 barrier for the first time.
The rise in prices in the first three months of 2006 was, however, smaller than the gains recorded in the two final quarters of 2005. There are also signs that housing market activity may be beginning to level off.
The weakening in the labour market, the continuing high level of house prices in relation to earnings and pressure on householders finances from the recent hikes in utility and council tax bills are all expected to curb demand in the coming months, therefore preventing a sustained acceleration in house price inflation.
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