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Survey says boom is over as average house prices fall

Average UK house prices fell by 0.1 per cent in April, providing firm evidence that the house price boom is truly over, according to Hometrack latest national house price survey.

Its says these figures provide the first real evidence that the property boom is over despite the fact that house price inflation has been declining since last May&#39s peak of 2.6 per cent.

The South-east bore the brunt of the declines, with 23 counties reporting price falls and Surrey taking the most fallout, with prices dropping by 0.9 per cent. In Berkshire, they fell -0.8 per cent, East Sussex -0.6 per cent and West Sussex -0.5 per cent.

However, there is a definite North/South divide, with 24 counties reporting healthy price rises. County Durham boasted the biggest rise of 0.6 per cent while South Wales 0.4 per cent, Teesside 0.4 per cent, Mid Wales 0.3 per cent and North Wales 0.3 per cent were not far behind.

House prices are now over 4.5 times average household incomes, the highest level for over 10 years. Given that on average houses are now taking five weeks to sell compared with two weeks in May last year, with an average of 12 viewings per property compared with nine last May, Hometrack says it is very likely that house prices will continue to deteriorate over the coming months.

Housing economist John Wriglesworth says: “With mortgage rates at their lowest levels for 40 years, housing is very affordable. However, lenders&#39 prudence with res-pect to income multiples is holding back house price rises. Unless lenders relax their lending criteria, we can expect very little house price inflation in the near future.”

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