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North takes lead on property price rises

House prices rose by 1.1 per cent in March, according to the Halifax house price index.

The figure is a fall from February&#39s 1.7 per cent increase. Halifax says the slowdown has been caused by an increase in the number of properties coming on to the market. For the first three months of the year, prices grew by 4.4 per cent.

The East Midlands saw the biggest increase on an annual basis, with prices up by 34 per cent for the year to March, followed by the North, where prices rose 31 per cent, and Yorkshire and Humberside – both on 28 per cent.

Greater London slipped down the regional price table with a 19 per cent rise over the past year, putting it ninth out of 12 regions.

Halifax is predicting annual house inflation to slow from 26 per cent at the end of 2002 to 9 per cent at the end of 2003. But it is expecting a marked North/South divide in 2003 with rises of 12 to 15 per cent in Northern England and Scotland compared with 2 to 3 per cent in London and the South-east.

Chief economist Martin Ellis says: “While affordability remains very good, with mortgage payments representing an historically small percentage of a new purchasers income, borrowers are constrained in the amount they can borrow by their income.

“The difficulties that first-time buyers face entering the market will curb demand and moderate house price inflation. There will, however, be a North/South divide, with the market slowing to a much greater extent in the South.”

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