Norfolks online estate agents. Est. 2007

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5 September 2007

The average house price in the UK has almost reached £200,000, according to the latest survey from the Halifax.

The UK's biggest mortgage lender said prices rose by another 0.4% in August, taking the average price to £199,770.

Its latest survey says the increase pushed the annual rate of house price inflation up from 11.2% to 11.4%, despite higher interest rates.

However, the lender predicts prices will slow down this autumn, as the past year's five rate rises take effect.

"The increase in mortgage rates since last summer is having an effect on housing affordability and will bite further during the coming months," said Martin Ellis, the Halifax chief economist.

"Negative real earnings growth in the first six months of this year, and rising food prices, are also reducing the income households have available for housing."

Further slowdown?

The strong economy, growing employment and shortage of housing were among the factors pushing prices higher, said the lender.

But it pointed to evidence that the market would slow down soon.

Lenders approved fewer mortgages during the summer months, interest from new buyers has fallen for eight months in a row, and actual property sales in July were 10% lower than a year ago.

Meanwhile, the higher level of interest rates has been eating into most people's take home incomes.

"Prices rose by 1.6% between June and August, compared with 4.5% in the three months to March," said Mr Ellis.

"Whilst the market remains robust, this provides further evidence that house price inflation has slowed since the beginning of the year."

Price breakthrough?

This is not the first time that a house price survey has claimed that average prices are at or near £200,000.

Average UK house prices
Halifax - £199,770
Nationwide - £183,898
DCLG - £214,222
Land Registry - £181,460

The monthly survey from the Communities and Local Government department (DCLG) said UK prices passed that level last December.

It takes its figures from a very large sample of all completed house sales, whereas those of the Halifax and Nationwide are taken from a sample of mortgage offers made to their own customers.

The effect that different methodologies can have on the final figures is illustrated by the experience of the Land Registry for England and Wales.

Its recently-introduced monthly survey of house prices, measured when they are registered with it at the end of the house buying process, says that they currently stand at £181,460.

But a previous quarterly survey, now discontinued by the Land Registry, reported last year that the £200,000 mark for England and Wales was passed between July and September 2006.

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