House prices near £200,000 mark

Will house prices boom again?
The price of an average home in England and Wales is closing in on £200,000, according to the Land Registry.
In the April to June period the average house price in England and Wales was up 7.71% on a year ago to £199,184.

In addition, the number of home sales jumped by 24% compared with last year, the registry said.

On Tuesday the Nationwide upped its forecast for house price growth in 2006 from the 0-3% range to 5%, despite a recent interest rate rise.

Last week, the Bank of England raised interest rates to 4.75% in a bid to quell inflation and some analysts think this move could cool the housing market.

Regional differences

The Land Registry figures show that annual house price inflation was at its highest, at more than 11%, in the north and north-west of England. The key London market saw prices rise by more than 8%.

Click here for regional price comparisons
At the other end of the scale, prices increased by 4% in East Anglia and by 4.4% in the East Midlands.

However, this is still ahead of both general price inflation and rises in average earnings.

Overall, the Land Registry report indicated that prices have risen in all parts of England and Wales during spring and summer.

Rate rise

The Land Registry's findings echo those of recent house price surveys by the Halifax and Nationwide.

Both groups noted that house price inflation - particularly in London - has beaten analysts' forecasts so far this year.

As a result, last week the Halifax upped its forecast for house price inflation in 2006 from 3% to 5%.

But last week's increase in UK interest rates to 4.75%, may dampen housing market demand, experts say.