Average house price 'nearing £200,000'

The average price of a home in the UK is on the verge of breaking through the £200,000 barrier, according to the latest house price index from Halifax.

The study, which found that prices rose by 0.4 per cent in August and 11.4 per cent year-on-year, noted that growth was now slowing as demand eased due to higher interest rates, but predicted that the market would remain in good health for the foreseeable future.

While other studies, such as that conducted by Nationwide, put the typical price of a home at closer to £180,000, the eighth consecutive month of growth has meant that all indices have reached record levels this year.

Nonetheless, price growth is expected to remain muted over the next few months, Halifax has said.

"The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have an increasing impact on household spending and housing demand," said Martin Ellis, chief economist at Halifax.

"Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale will, however, continue to support house prices," Mr Ellis concluded.


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