The Halifax house price report for December says house prices fell by 1.0 per cent last month. However, prices in the fourth quarter of 2006 were 4.2 per cent higher than in the previous quarter.
House prices increased by 9.9 per cent in 2006, just above the long-term average of eight per cent per year. In Greater London, the average price increased to £287,176 by the end of the year. This puts it above the inheritance tax threshold (or IHT, currently £285,000) for the first time. Halifax again calls on the government to commit to linking the IHT threshold to house price inflation.
The average price in the South West broke through the £200,000 barrier for the first time in in the final quarter of last year, at £200,931. The 10.5 per cent increase in prices in the South West in 2006 represented a recovery following a 1.9 per cent fall in 2005. Similarly, prices in East Anglia also achieved double-digit growth (13.0 per cent) after a small fall in prices (-1.0 per cent) in 2005.
As expected, house price inflation remained modest in northern England in 2006. The North recorded the lowest regional rise during the year (3.1 per cent), the smallest increase in the region since 2000.