House prices ease off in October

The Department for Communities & Local Government DCLG reports average house prices dropped by 0.3% from September to £197,987. However, the annual rate of house price inflation continued to rise, up from 8% to 8.6%, as a result of a larger fall in prices in October last year.

The DCLG index is not seasonally adjusted and, says Capital Economics, the data suggest that the underlying price pressures in the market are stronger than last year. At 8.6%, the annual rate of increase in house prices is at a nineteen month high.

The main reason for the fall in the average price being paid in the month is being attributed almost entirely to lower prices for detached houses, which fell by 2.1%. Although terraced houses also eased down, by 0.1%, the price of other properties, semi-detached houses, bungalows and flats all rose.

House prices are rising at their fastest in Northern Ireland, up by 31.6% on year-ago levels according to the DCLG. Elsewhere, house price inflation in London reached double digit rates for the first time since June 2004.

It is unlikely that there is any great significance to the slowdown in average prices in October - given its lagging nature the DCLG index reports prices at the completion, not mortgage approval or agreed sale stage the data mostly still related to house purchases and mortgages that will not have been significantly affected by the August interest rate rise, let alone November's.

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2006-12-11 13:36:24 © Moneyextra.com