Nationwide reports that the average UK house price is now £179,363, up 2.2% over the last year, but down 1.7% over the last quarter. The most expensive region is London and the least expensive region is the North. The region with strongest annual price growth is Scotland and the region with weakest annual price growth is now Northern Ireland.
Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said: "The annual rate of house price growth slowed dramatically in every part of the UK in the first quarter of 2008, bringing the average rate in the UK down to less than a third of the rate at the end of 2007. The annual rate of house price growth in the first quarter of 2008 was 2.2%, down from 6.9% at the end of 2007. House prices slowed most sharply in Northern Ireland where the annual rate fell from 24.2% to -3.4%, but this still leaves average prices more than £15,000 higher than at the end of 2006.
"The first quarter figures clearly show Scottish house prices as the most resilient in all of the UK. Although prices here edged down slightly from the previous quarter, Scotland has now overtaken London in the league table of annual house price inflation. Scottish house prices are 6.3% higher than one year ago, some four percentage points above the UK average of 2.2%. In the past we have alluded to the fact that mortgage affordability in Scotland is not as stretched as in other parts of the UK, and this is likely to be the main factor behind the relative resilience of Scottish house prices.
"After seeing blistering rates of growth through much of 2006-7, London property prices recorded their first quarter-on-quarter drop since the third quarter of 2005. This caused the annual rate of house price inflation to drop from 12.8% to 5.6%, the lowest since the second quarter of 2006. House price growth in London was always likely to slow from the double-digit rates of 2007, given that housing affordability was becoming particularly stretched for local first-time buyers. However, the financial market events since August have probably added to the slowdown by reducing confidence among buyers working in the City of London. Despite this slowdown, London prices are still showing the highest rate of annual growth in England and Wales, a situation that has been in place since the first quarter of 2006. However, the gap between London and the second strongest English region, Outer Metropolitan, has narrowed to 2.0 percentage points in the first quarter, from 4.3 percentage points at the end of 2007.
"Annual house price inflation in the rest of England's regions ranged from a low of -0.2% in the North West to a high of 3.6% in the Outer Metropolitan region. The steepest decline in house price inflation was in the South West, where annual growth dropped from 6.4% at the end of 2007 to 0.3% in the current quarter. This leaves the South West with the lowest rate of annual house price inflation in southern England.
"Although annual house price inflation has fallen across all of the Northern regions, it has done so at a slower pace than in the South. As a result, the gap between house price inflation in the North and South has narrowed for the second consecutive quarter. The gap now stands at 3.1 percentage points, down from a peak of 6.7 percentage points in the third quarter of 2007. Nonetheless, a typical property in southern England still costs
over £85,000 more than in northern England."
