Southern boom pushing up house price inflation

Soaring house prices in London and the south-east are artificially pushing up prices in the rest of the country, it has been claimed.

A spokesperson for Chase de Vere Mortgage Management said that rather than booming, outside of London house prices had been flat, with some regions even seeing negative growth.

Very strong growth in London and the south-east was responsible for driving the average house price inflation rate in the UK to current levels, he commented.

Mr Gardner said that in some regions house price inflation had only moved by a quarter which proved the flatness and inactivity of the regional UK property market.

The company believes that Thursday's quarter-point base rate rise is likely to have an effect on this, by slowing down the property market even in the booming southern regions.

Mr Gardner added what while the market was not likely to grind to a halt, it was likely that there would be a slowdown in price growth as a result.

A recent report from the London Housing Association predicted that the average house price in the capital was set to reach £400,000 in the next five years.