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Property price rises plummet

UK house price rises have fallen sharply, with an increase of just 0.2 per cent in August after a 1.9 per cent rise in July and 2.4 per cent in June, according to Halifax.

Its monthly house price index shows the annual rate of price growth has fallen to 18.8 per cent from 20.8 per cent in July.

Housing transactions in August remained at the June and July level of 132,000, down from 139,000 in May but 10 per cent higher than August last year at 120,000.

The ratio of house prices to average earnings has risen to 4.2 from 4.1 in July and is 0.6 higher than in the same period last year. Halifax says this shows earnings have failed to keep pace with house prices over the last 12 months.

Halifax says property shortages have moderated slightly and this has helped steady the growth in prices, particularly in the South-east and London.

Head of group economics Gary Styles says: “The UK housing market has been very strong in 2002 but house price growth has gradually eased over the last three months. Indicators of activity, while confirming a buoyant marketplace, show some early signs of slowing. We expect house price growth to continue to slow in the coming months as more sluggish income growth, some increase in supply and lower buy-to-let volumes reduce overall demand.”

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