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Last Updated: Thursday, 6 October 2005, 08:48 GMT 09:48 UK
House price growth moves up again
House buyer
Are prices starting to rise again?
House price inflation rose in September according to the latest figures from the Halifax bank.

The country's biggest mortgage lender says prices are now rising at an annual rate of 3%.

The figure is slightly higher than the 2.5% rate recorded in August - and includes a 2% rise in just the past three months.

That puts the Halifax in line with other recent reports indicating the housing market may be picking up again.

The mortgage lender's chief economist Martin Ellis said the Bank of England's decision to cut interest rates in August had give a boost to would-be home buyers. But he doubted that rampant inflation will start again.

"The reduction in economic growth this year and the continuing high level of house prices in relation to average earnings are expected to prevent a sustained surge in house prices," he said.

House price graph

The latest snapshot on house prices from the Halifax could prove a factor in the Bank of England's September decision on interest rates, due at 1200BST on Thursday.

According to the Halifax, part of the HBOS banking group, house prices rose by 1.2% in the month of September, following a 1.6% rise in the month of August.

Market reviving

Last month the Bank of England reported that the number of loans approved for house purchase but not yet lent - widely seen as a good indicator of future trends - had risen to their highest level in more than a year.

The Royal Institution of Chartered Surveyors (RICS) also reported in September that its members had seen a rise in enquiries from new buyers, for the third month in a row.

They interpreted this as a clear sign that the market may be about to revive after the huge slump in sales that has taken place over the last year.

Even so, the various property market surveys are not all pointing in the same direction.

RICS also said that in its view prices were still falling in more areas of the country than were rising.

And the Nationwide building society, the other major mortgage lender that monitors market tends, said last week that in fact prices were still slowing.

Its index suggested that annual house price inflation is still subsiding and stands at just under 2%.


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