House price growth is showing signs of levelling out, according to a closely-watched monthly survey from Halifax, the UK?s biggest mortgage lender.
Thursday?s report showed prices grew by just 0.1 per cent in May, similar to figures from rival lender Nationwide last week reporting ?sluggish? monthly growth of 0.2 per cent. Halifax?s annual rate of growth stands at a relatively high 9.1 per cent, thanks to weak corresponding figures a year ago.
The new figures put the average cost of a house at ?178,997.
Martin Ellis, Halifax chief economist, said higher unemployment and household bills and the high level of prices compared with earnings would curb growth for the rest of the year. He also pointed to the Bank of England?s recently reported falls in the number of mortgage approvals.
Mr Ellis remained upbeat on the outlook for the market, however.
?Sound fundamentals ? a strengthening economy, high levels of employment and low interest rates ? will, however, continue to support the housing market over the remainder of 2006, ensuring that the market remains in sound health,? he said.
The Bank of England?s monetary policy committee makes its decision on interest rates at midday on Thursday. Analysts do not expect a change.
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Howard Archer of the Global Insight Consultancy said there were growing signs the ?mini boom? experienced earlier this year was faltering and that price rises would moderate over the coming months. ?We are becoming modestly more confident in our long-held belief that house prices will ease back into an extended period of relatively modest rises over the coming months,? he said.
A separate report from Halifax on Thursday said the number of million-pound properties in Britain had risen to 66,600, compared with just 3,400 in 1995. The rise in property values outside London means the capital?s share of the million-pound market now stands at 58 per cent, compared with 79 per cent in 1995.
On Friday the FT publishes the latest edition of its own house price index. The FTHPI uses adjusted Land Registry data to deliver the most accurate guide to domestic property prices in England and Wales.
