Page last updated at 11:51 GMT, Tuesday, 16 February 2010

House prices rose by 2.9% in 2009, says government

Houses under construction
House prices have risen for eight months in a row, the DCLG says

House prices in the UK rose by 2.9% last year, according to the latest government house price survey.

Prices rose by 3% in England, 3.8% in Scotland and 1% in Wales, but fell 6% in Northern Ireland, the Department for Communities and Local Government said.

The figures suggest that the recovery in house prices last year was not as strong as suggested by lenders.

Both the Nationwide and the Halifax have said that UK house prices rose by nearly 6% last year.

The DCLG's latest survey said that the average UK home cost £200,307 at the end of December, up 0.8% from November.

Prices have now risen for eight months in a row according to the DCLG's figures.

The region where they rose fastest in 2009 was London, where they went up by 4.9% over the year.

Howard Archer, chief UK economist at Global Insight, said: "Virtually all house prices measures, including the DCLG, indicate that house prices troughed in the early months of 2009 and have been firming ever since.

"The revival in house prices since the early months of 2009 is a consequence of buyer affordability and interest being lifted by sharply reduced mortgage interest rates."

Simon Rubinsohn of the Royal Institution of Chartered Surveyors said: "Land Registry numbers show a broadly similar picture [to the DCLG survey] and, significantly, the latest figures from the Bank of England show the cost of mortgage finance to be easing."

"This, alongside some tentative signs that money is becoming a little more freely available should help to continue to push prices higher for at least the next few months," he added.

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