House prices fall - that's official

PROPERTY prices fell 1.1% in a month shaving more than £2,000 off the value of the average home, according to official figures.

The average house price in the UK in November stood at £159,480, down from £161,567 in October, according to the latest house price index from the Office of the Deputy Prime Minister.

The price fall, the second since the index was launched in the summer, means annual house price gains were only 9.7% in November compared with 12.1% a month earlier.

The market cooled in all four home countries, although house price inflation in Wales, at 19.6%, and in Scotland, at 16.1%, remains higher than England‘s 9.2% growth.

Annual price rises continue to be strongest in the North East, at 19.6%, and the North West, at 17.6%. Property inflation in London, eastern England, the South East and the West Country were all less than 10%. The London market was weakest with annual rises slipping from 6.2% to 5.2%.

The ODPM house price survey was launched in September in response to criticism that a raft of house price data – produced by publicity-hungry lenders, surveyors and agents - might be distorting the decisions of buyers and sellers. The Treasury and the Bank of England backed calls for a definitive index.

Rivals have criticised the new survey because it works on data that is already two months old and only includes information on properties bought with a mortgage. The Government also warns against reading too much into month-on-month comparisons because the index has not been run enough to adjust the figures for seasonal swings.

Recent surveys from Nationwide and Halifax suggest the market remains buoyant. Halifax said prices rose 1.8% in December – a 15.4% rise on a year earlier - compared with 1% in November. Nationwide said price inflation was up from 1.2% to 1.5%.

The lenders are predicting rises in 2004 of 8% and 9%, respectively.

Predictions for UK house prices in 2004: