House price inflation in the UK is slowing just as the average price of a home edges up to the £200,000 sterling mark for the first time ever, the country's biggest mortgage lender said today.
In its monthly survey of the sector, the Halifax, which is part of the HBOS PLC banking group, said house prices increased by only 0.4 per cent in August from the previous month, in line with market expectations.
That's the third month in the last four that house prices have grown by less than 0.5 per cent. As a result, the three monthly increase in house prices has fallen from 4.5 per cent in March to 1.6 per cent in August.
'Whilst the market remains robust, this provides further evidence that house price inflation has slowed since the beginning of the year,' said Martin Ellis, the Halifax's chief economist.
'The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have an increasing impact on household spending and housing demand,' he added.
Elsewhere, the Halifax said base effects have pushed up the annual rate to 11.4 per cent in August from 11.2 per cent in July. This measure is a quarterly year-on-year figure.
However, Halifax said the annual rate should decline over the coming months as the strong monthly house price gains last summer and autumn drop out of the year-on-year comparisons.