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Monday, 21 November 2005, 13:12 GMT

UK house prices show slight rise

People looking at a house Annual house price inflation rose in September for the first time in six months, according to the Office of the Deputy Prime Minister (ODPM).

In the year to September, house prices grew on average by 3.3%, up from August's figure of 2.8%.

The ODPM said prices in the UK rose 0.3% between August and September, with the average property costing £186,723.

Meanwhile, property website Rightmove said prices rose 0.8% in the four weeks to 12 November.

Over the past year all the major property market surveys have shown annual house price inflation falling from double digits to low single figures.

"A firm labour market and the recent interest rate cut have helped reverse the declining trend"
Milan Khatri, Royal Institution of Chartered Surveyors

But the ODPM said that prices rose in seven out of 12 UK regions.

Annual house price inflation stood at 16.7% in Northern Ireland and 10.1% in Scotland.

In addition, prices are continuing to grow apace in the north of England.

Prices rose by 7.9% in the north-west and 7.1% in Yorkshire.

At the other end of the scale, prices are falling in the south-west, while in London prices have grown just 1.9% during the past twelve months.

Market firming

The Halifax and Nationwide have both recently said that prices have picked up a little during the autumn.

The most up-to-date survey based on asking prices, issued on Monday by Rightmove, showed the annual rate of house price inflation rising from 1.5% to 4%.

Commenting on the ODPM survey, Milan Khatri - chief economist at the Royal Institution of Chartered Surveyors - said the housing market was "gradually firming."

"House price rises have slowed from a high of 14.3% in July 2004, due to the impact of rising interest rates last year, but a firm labour market and the recent interest rate cut have helped reverse the declining trend," he said.



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