Business

House price inflation hits 8.5% in England and Wales

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Image caption House prices are still picking up, despite sluggish sales

House prices in England and Wales are continuing to rise strongly, according to the latest figures issued by the Land Registry.

Prices in April rose by another 0.2%, pushing up the annual rate of increase to 8.5%.

This was the fastest rate of growth since September 2007.

Meanwhile, the number of mortgage deals on offer has risen again to more than 2,000 as lenders continue the modest relaxation of their lending criteria.

The financial information service Moneyfacts said there were 2,191 deals available at the start of June, requiring down payments of between 0% and 40% of the value of the home being purchased.

That was a 14% increase in the number of mortgages in past month, although the proportion of them requiring at least a 25% deposit was steady at 56%.

"Lenders continue to ease their criteria and average rates still fall as competition for a limited amount of mortgage business gathers pace," said Darren Cook at Moneyfacts.

'Overtaking steadily'

The Land Registry said the cost of the average home in England and Wales now stood at £165,596.

Prices have been rising fastest in London over the past year.

They were up by 14.8% in the twelve months to April and put the capital's average house price at £341,487 after an increase of 1.6% in April alone.

"While London's annual change mirrored that of England and Wales for quite some time, the capital's growth rate is now overtaking steadily," the Land Registry said.

All of the 10 regions in England and Wales have seen prices rise in the past year, with the smallest increase being in Yorkshire and Humberside at just 0.7%.

Despite the acceleration of prices, sales are still very sluggish.

Last month figures from HM Revenue & Customs (HMRC) showed that completed sales had fallen by 2,000 in April to 71,000.

Although sales across the UK in the first four months of the year were 26% higher than in the same period last year, they were still nearly half the level reported in either 2005, 2006 or 2007.

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