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TUESDAY 5TH APRIL 2005
 HOUSE PRICES LANGUISH FOR SIX MONTHS

House prices increased by 0.5% in March, offsetting February's 0.5% fall, said Halifax today. The picture on a month-to-month basis remains mixed with four rises and four falls in the past eight months. Overall, however, there has been virtually no change in UK house prices since last September.

The annual rate of house price inflation continues to slow, dropping below 10% in March for the first time since November 2001, to 9.7%.

The headline increase contrasts with Nationwide's March figures, which showed a 0.6% fall - the largest in almost 10 years.

Regionally, the strongest house price gains in the first quarter of 2005 were outside England. The biggest price gains during the quarter were in Scotland (6.1%), Northern Ireland (3.1%) and Wales (2.4%). Prices fell in the first quarter in the South West (-1.2%), East Anglia (-0.9%) and the North (-0.6%).

The average price in Scotland (£105,397) broke through the £100,000 barrier for the first time in 2005 Quarter 1. Scotland is the last part of the UK to reach this landmark.

Prices in London increased by 0.1% in 2005 Quarter 1 following two successive quarterly declines, suggesting that the market in the capital may be stabilising.

There has been a clear north/south divide in house price performance over the past year. Northern Ireland (25%) and Scotland (23%) have experienced the strongest price rises, followed by the three northern English regions – Yorkshire and the Humber (16%), the North West (15%) and the North (14%). Greater London (1%), the South East (5%) and the South West (6%) have recorded the smallest gains.

The differential between the average price in the south and its equivalent in the north has continued to narrow with prices in the south £83,000 higher than in the north in 2005 Quarter 1. This is £16,000 lower than two years' ago when the north/south differential stood at a record £99,000.

There has been further evidence that market activity may be stabilising following a sharp drop in the second half of the year. The latest Bank of England figures showed a modest improvement in the number of loans approved for house purchase in February, to the highest level for four months. Similarly, Halifax Estate Agents report an upturn in sales agreed since the start of 2005.


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