Average Mersey home now sells for £163k

Oct 5 2007 David Bartlett, Liverpool Daily Post

HOUSE prices have seen only marginal growth across the region during the past year – a sign, say experts, that a slowdown in the market has started.

The average price in Merseyside is now £163,016, a rise of just 5% in the past 12 months, new quarterly figures reveal.

The tables were released as the Bank of England’s Monetary Policy Committee yesterday voted to maintain the interest rate at 5.75%.

Last night, economist Peter Stoney, honorary senior fellow at Liverpool University, said marginal rises were no surprise, and could be taken as a sign of a slowdown.

He said the “market correction” would now narrow the afforda- bility gap, by giving wages a chance to catch up with house prices.

In Cheshire, the average home now costs £189,861, up 3% on last year, and in Warrington and Halton, prices increased by 4% to £171,159.

House prices in Lancashire rose by 5% to an average £162,117, according to data compiled by the Nationwide.

The figures are put together every three months and show prices for the year to date.

Last time the Nationwide published its figures in July, Liverpool was named top of the “coolest” towns or cities table after it saw zero per cent growth.

It has now dropped out of the table, which features five towns or cities, and is now topped by Newcastle with a 1% rise year on year. Belfast was declared “hottest” again, with a 50% rise to £312,637.

Mr Stoney said: “It’s not a surprise. I am feeling quite gratified that it’s turned out that way.

“It’s just confirming that expectation that we are going to see a slowdown and was entirely predictable.

“I think house price inflation will continue to drop, though.

“Unless rates come down, I can’t see house price inflation picking up.” The last time there was a change was in July when the bank raised interest rates by 0.25 percentage points.

“The immediate crisis with the Northern Rock has been dealt with and now we can see an orderly correction. What we are seeing is a market correction, a downward adjustment.”

He said this would allow for the gap between wages and house prices to narrow.

Prices might pick up in spring, he said, but there was “a lot of water to go under the bridge before then”.

He said there could be a General Election and the Conservatives’ pledge to raise the stamp duty threshold and abolish Home Information Packs (HIPs) would have an impact on the market if the party got into power.