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Halifax warns of drops after third consecutive house price rise

Halifax has revealed that house prices rose in the UK by 1.6 per cent in September but warns that the upward trend will not continue.

The latest Halifax house price index reports that prices rose by 1.6 per cent in September, up from a 0.8 per cent increase in August and the third consecutive rise Halifax has recorded. It was also the first average price rise over a quarter for two years in Q3 2009 – between July and September prices rose by an average of 2.8 per cent. It says the average house price in the UK is now £163,533.

However, year-on-year figures from the bank are still down by 7.4 per cent, and it predicts that as more people put their homes on the market, supply strains will ease and prices will fall once again.

Halifax housing economist Martin Ellis says: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. But continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale.

“This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.”

The latest Halifax house price index reports that prices rose by 1.6 per cent in September, up from a 0.8 per cent increase in August and the third consecutive rise Halifax has recorded. It was also the first average price rise over a quarter for two years in Q3 2009 – between July and September prices rose by an average of 2.8 per cent. It says the average house price in the UK is now £163,533.

However, year-on-year figures from the bank are still down by 7.4 per cent, and it predicts that as more people put their homes on the market, supply strains will ease and prices will fall once again.

Halifax housing economist Martin Ellis says: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. But continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale.

“This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.”

Property Portfolio Rescue director Nick Hopkinson says: “As yet another monthly house price index heralds a housing market revival, the public could be forgiven for thinking that property prices are booming again. These monthly numbers simply reflect ‘cherry picked’ lending to high earners with big deposits on prime property by the lenders concerned.

“House sales volumes are still at rock bottom and overall mortgage lending is falling, as any ordinary buyer will testify. A dark grey cloud of rising unemployment, falling household income, tax rises and public service cuts looms on the horizon. Anyone wanting to sell their home should move fast before the harsh economic winter really sets in.”

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