Prices rise and correction unlikely

Posted: 11 Dec 2007 11:53:11 GMT

House prices rose marginally in October, according to the latest Department of Communities and Local Government (DCLG) House Price Index.

House prices rose marginally in October, according to the latest Department of Communities and Local Government (DCLG) House Price Index.

The report reveals that annual inflation hit 11.3 per cent, up from 10.8 per cent in September.

It means that the average property price was £220,195, with London still the best performing and most expensive region in the UK.

The average property in the capital was valued at £343,444, with annual growth recorded at an impressive 17.7 per cent.

This was followed by the south-east, where growth hit 11.7 per cent, the south-west (9.6 per cent), the east (9.3 per cent) and Yorkshire and Humber (7.3 per cent).

Commenting on the index, Howard Archer from Global Insight said that those who predict a major correction of house prices are wide of the mark.

"While modest annual falls in house prices are highly possible in 2008 and prices seem set to remain pressurised for an extended period, at this stage we do not expect to see a sharp correction," he revealed.

"We believe that the downside for house prices will be limited by a lack of supply, the increasing number of households, high employment and the fact that few vendors are currently having to sell for 'distressed' reasons," Mr Archer continued.

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