LONDON (Thomson Financial) - UK house price inflation continued to accelerate in the second quarter this year but showed further signs of cooling, research by Nationwide showed.
In a quarterly survey of the sector, the country's biggest building society said house prices were up an annual 10.2 pct in the second quarter, faster than the 9.5 pct registered in the previous quarter.
The acceleration was due mainly to the continued buoyancy of the property markets in London and Northern Ireland, although growth there had dropped from the all-time record high of the first quarter. The North West and West Midlands saw the weakest growth.
Despite the strong annual rates, the growth in house prices slowed for a second consecutive quarter, growing just 2.1 pct between the first and second quarters, compared to the 2.3 pct quarterly growth experienced between the fourth and first quarters, and the 3.3 pct growth prior to that.
"The acceleration of annual house price inflation was in part driven by an interim period of relative weakness in the second quarter of 2006," said Nationwide's chief economist Fionnuala Earley.
Looking ahead, the Nationwide research expects house price inflation to slow down further, although this will take longer in London.
"Price growth in England should decelerate in the second half of 2007," the survey said.
"In the capital this process will take somewhat longer, as the market still has some residual momentum and currently benefits from some supporting factors not present in the rest of England," it added.
chinny.li@thomson.com
cml/ajb
