House price inflation dips

The rate at which house prices are increasing continued to slow during August, Government figures showed.

The index, produced by the Office of the Deputy Prime Minister, said the cost of property increased by 14% during the year to the end of August, down from 14.6% for the 12 months to the end of July.

At the same time the average price of a property rose slightly month-on-month to £159,010 in August from £156,273 in July on a non-seasonally adjusted basis - a 1,8% rise.

The new index, which is based on around a quarter of all properties bought with a mortgage each month, was launched in September.

It followed calls from the Bank of England and the Treasury for an official monthly house price index.

During the year to the end of August price rises were strongest in the North East, where the cost of a home soared by 26.3%, while in London they grew by just 8.9%.

London remains the most expensive place to buy a home, with property costing an average of £245,378.

Scotland is the cheapest at £96,413, followed by the North East at £100,891.

Annual price growth in England slowed from 14.8% the previous month to 13.9% in August, with only northern regions and the East Midlands reporting a rise in the rate of growth.

But Scotland, Wales and Northern Ireland all reported an increase in annual house price inflation, with Northern Ireland showing the biggest rise from 4.6% in July to 8.5% in August. First-time buyers paid an average of £123,469 for a property during August, while former owner occupiers paid around £182,907.

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