House prices slow down | News_ | Guardian Unlimited Money

The price of the average property fell slightly in October from 198,552 to 197,987, according to government figures published today. The Department for Communities and Local Government, formerly the Office of the Deputy Prime Minister, said that prices for detached houses had experienced the greatest fall, dropping by 2.1%, while terraced houses saw prices fall by 0.

1%. All other types of property, such as semi-detached houses, bungalows and flats, increased their price by between 0.3% and 0.

9% in the same month. Annual rates of inflation carried on rising in England, Scotland and Northern Ireland, but fell in Wales, the report said. The typical house in England cost 205,688, compared with 175,991 in Northern Ireland, 158,105 in Wales and 145,315 in Scotland.

London house prices stayed highest, at 288,593 for the average property, with an increase of 10.6% over the year, the report added. While overall prices slipped a little, first-time buyers were faced with a further rise in prices of 0.

3% in October, and 8.5% over the year. Price tags for properties bought by former owner-occupiers shrank by 0.

5% in October, compared with a larger fall of 1.1% in the same period last year. Meanwhile, a second set of figures published today suggested that home sellers have also dropped asking prices in the run up to Christmas.

The property website Rightmove said the asking price of the typical seller had fallen by 0.3% in December. The average property price tag is now 221,751, Rightmove said.

According to the website, sellers putting their property on the market in the run-up to Christmas are usually highly motivated to sell and price their houses attractively to catch the eye of buyers who may have become distracted by festive preparations. As a result, a slight drop in average selling prices was to be expected. A regional breakdown in asking prices showed that London had bucked the national trend, with sellers asking for an average of 355,097 for a home in the capital, up by 2.

9% in December. Miles Shipside, commercial director of Rightmove, said: "The strength of the housing market in 2006 has exceeded everyone's expectations and we have seen further growth this autumn, which is only slowing down now that Christmas is on the horizon." Mortgage lender Halifax, meanwhile, predicted today that house price inflation will cool to 4% in 2007, the lowest figure for a decade.

Halifax predicted that interest rates will rise to 5.25% in early 2007 but fall back to 5% by the end of the year.