(1888PressRelease)
February 25, 2007 - Adjusting prices for the season, the average property now costs £201,090 as property prices surged to 9.9 per cent in the last month of 2006, a full percentage point up from November's figure.
But this growth was not blanket across the UK. Perhaps because average prices are already so high at £208,525, England's house price inflation was found to be 8.9 per cent while Scotland's was 15.2 per cent and Wales' 9.1 per cent.
However the clear winner for the year was Northern Ireland, where annual property price inflation stood at a monumental 39.9 per cent at the end of the year. The region appears to be benefiting from the newfound political stability as well as a pick-up in its economy, spurred on by the growth in the Republic.
Furthermore, house prices have been rapidly rising in Ireland for a number of years now and this wave seems to have finally cross over the border to the north.
Due to the chronic shortage of properties on the market, smaller homes were the biggest gainers in value in December as buyers were forced to increasingly compete with each other for more affordable housing.
The average flats increased by 2.6 per cent from November to December, while bungalows jumped by 2.2 per cent and semi-detached homes were up by 1.6 per cent. By contrast, the price of detached houses across the UK dropped by 0.8 per cent.
However in spite of the good news for property investors, Oliver Gilmartin, an economist from the Royal Institution of Chartered Surveyors (Rics) claimed that the market may begin to struggle due to affordability issues faced by all-important first-time buyers.
"With average house prices breaking the £200,000 mark in December, the housing market has breached a psychological barrier which will further the woes of first time buyers," he said.
"There was little Yuletide cheer for would be buyers with house prices up countrywide, despite two interest rate rises in 2006."
A healthy flow of first-time buyers is always essential in the housing market to start off a chain of moves that allows homeowners to move up the housing ladder.
Although Mr Gilmartin admitted that the recent rate rises "will start to slow the market in 2007", he stated that raising deposits would become a serious issue for many buyers.
He added: "Even in the East Midlands, the average house price is now £146,183 which is over five times the average income."
