Martin Ellis, group economist at the Halifax, said, "While this was lower than the 3.0 per cent gain in the third quarter, the annual rate of house price inflation accelerated from 9.9 per cent in the third quarter to 11.7 per cent in the final quarter. Moreover, the annual increase in prices in 2001 was the biggest since 1988 as the lowest mortgage rates since the 1950s and falling unemployment boosted housing demand."
The Index found that prices increased the most in East Anglia (by 19.8 per cent), for the second year in succession.
Greater London increased by 17.1 per cent, the South West by 16.2 per cent and the South East 15.8 per cent. The smallest gains were found in Northern Ireland at 6.8 per cent and Scotland at 5.2 per cent.
The difference in prices between Greater London and the national average rose to almost £15,700, and the average price in London is now over £83,000 greater than the UK average.
"The housing market is expected to weaken over the next 12 months in response to the slowdown in the wider economy and an expected rise in unemployment. Prices in the UK are predicted to rise by 5 per cent in 2002 following a 12 per cent increase last year. Regionally, the south of England is likely to bear the brunt of the housing market slowdown. Nonetheless, while we expect prices to rise by more in the north compared with the south over the coming 12 months, we are not predicting an acceleration in house price inflation in the north," said Ellis.
