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House prices rise for sixth consecutive month

House prices rose for the sixth consecutive month in October though at a slightly slower pace than in September according to Nationwide’s house price index.

Prices rose by 0.4 per cent compared with 0.9 per cent in September, with the average price rising from £161,816 to £162,038.

Annual house price inflation was 2 per cent in October, marking the first time the annual change has been positive since March 2008.

Nationwide’s chief economist Martin Gahbauer says: “House prices rose for a sixth consecutive month in October, but the strong upward momentum in
property values seen over the summer is showing some signs of moderating as we head into the autumn months. The price of a typical property was 0.4 per cent higher on the month in October, compared to an increase of 0.9 per cent in September and 1.4 per cent in both July and August.

“The three month on three month rate of change – generally a smoother indicator of the near term trend – dropped back slightly from 3.8 per cent to 3.4 per cent. At £162,038, the average price of a typical UK property was 2 per cent higher than a year earlier, representing the first time since March 2008 that the annual rate of change has been in positive territory. Over the first ten months of 2009, the seasonally adjusted index of house prices has risen by 4.6 per cent, though relative to the October 2007 peak it is still down by 13.1 per cent.”

Property consultancy Carter Jonas senior partner David Smith says: “The stand-out symptom of the current property market is that stock levels are, in many cases, half of what they were in May. There is no sign on the horizon of more natural stock levels. As any buyer will know, there is very little choice out there at present.

“The ongoing rise in prices has been caused exclusively by the shortage of stock and growing demand, and the absence of new housing. With house prices higher than a year ago, now could be a window for sellers to achieve a price for their property that would have been unthinkable in the spring. Rising unemployment and, at some point, higher interest rates, could see a further stabilisation, or even reverse, in prices.”

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