Further house price rises last month

Posted: 05 Oct 2006 12:26:41 GMT

UK house prices rose by one per cent last month, new figures reveal.

UK house prices rose by one per cent last month, with the average property now costing around £181,186, new figures reveal.

According to the Halifax House Price Index for September 2006, the annual rate of inflation to eight per cent has eased for the third month in a row to eight per cent, the lowest rate since April this year.

Based on around 15,000 house purchases per month, the index suggests that prices have risen most strongly over the past 12 months in Northern Ireland and Scotland, while inflation has been significantly slower in other regions and the ratio between house prices in the north and south has increased marginally for the second year in a row.

Halifax chief economist, Martin Ellis, said: "We expect increased utility bills and higher interest rates to curb housing demand over the coming months, causing annual house price inflation to ease between now and the end of the year."

Analysts are predicting an increase in the base rate of interest rate from 4.75 per cent to five per cent next month and a subsequent cooling of the UK housing market during 2007.

Commenting on the Halifax figures, RICS chief economist, Milan Khatri, said: "A second consecutive month of strong house price rises reported by Halifax for September confirms a buoyant picture for the property market amid robust conditions for consumer finance."

First-time buyers are increasingly struggling with affordability problems, as housing market inflation continues to outstrip wage rises.

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