Summarising the five major UK house price indices, Assetz showed the average property price rose from £198,888 in December to £199,451 in January, with the rate of growth remaining strong at 9.9 per cent. This was a 0.1 per cent decrease on the previous month and a 5.7 per cent increase since January 2006.
Assetz predicted it was likely to plateau at around this level, and that the Bank’s decision to hold rates recognised the risks to inflation were under control and was expected to lower towards the end of 2007.
Stuart Law, managing director of Assetz, said: “If the Monetary Policy Committee was to inflict another rate rise on consumers it would cause a modest hike in repossessions while doing little to restrain house price growth.
“Young people today are the first generation to be considerably worse off financially than their parents, so we will see more people releasing equity to help their children.”
Kevin Paterson, managing director of Park Row Mortgages, said: “I’m surprised the average house price is as high as that, but I think the growth will continue. For all the talk that the market is slowing, there is no sign of this materialising.”
