The weakening labor market, the continuing high level of house prices in relation to earnings and pressure on householders' finances from the recent hikes in utility and council tax bills are expected to curb demand in the coming months, therefore preventing a sustained acceleration in house price inflation. |
There were also signs that housing market activity may be beginning to level off. |
These falls need to be viewed in the context of the substantial price rises recorded in these parts of the country during the last few years. |
This pickup in monthly house-price inflation is consistent with the continuing upward trend in market activity in recent months and the previous pattern of house price movements when the Bank of England begins to reduce interest rates. |
We expect this trend to continue during 2006 as house prices rise at a slower pace than earnings, therefore making it a little easier for first-time buyers to enter the market. |