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The BBC's Rory Cellan-Jones
"Just when we thought the housing market had gone flat"
 real 56k

Wednesday, 4 October, 2000, 06:57 GMT 07:57 UK
House prices edge up

House prices in the UK have risen at their fastest for the year during September, but analysts say the development is just a blip.


Overall the latest monthly figure suggests that the housing market has stabilised following the sharp slowdown earlier in the year

Halifax
According to the monthly house price survey compiled by the Halifax bank, prices rose by 1.6% during September, and were up by 9.2% compared with the same time a year earlier. The average house now costs 86,304.

During August, house prices had risen by just half a per cent on the month, and 7.4% on the year.

However, the bank's experts say this is not the start of another house price boom

"We expect the annual rate to ease over the coming months, falling to 4% in the final quarter of 2001", a spokesman said.

A survey published by building society Nationwide on Monday suggested a similar trend, with house prices rising a modest 0.4%, although the annual rate stood at 10.2%.

Analysts explain the different figures with the fact that the Nationwide's business is more concentrated in the south of England, where prices have been under greater pressure recently.

Cooling down

At the beginning of the year, house prices had risen sharply across the country, and especially in the south-east.

But during the summer, house price inflation fell sharply, reflecting a cooling of the market.

The Halifax now says that the "latest monthly figure suggests that the housing market has stabilised following the sharp slowdown earlier in the year".

The figures from the Halifax and Nationwide are likely to influence the thinking of the Bank of England's Monetary Policy Committee, which is meeting on Wednesday and Thursday to set the level of interest rates.

House price inflation was cited as a concern by the bank, but as the market cools down mortgage holders will hope that the MPC will keep rates on hold or even cut them.

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See also:

02 Oct 00 | Business
Property prices edge higher
28 Sep 00 | Business
North-south divide confirmed
22 Sep 00 | Business
Concern grows over 'sellers' packs'
05 Sep 00 | Business
Housing market cools
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