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House prices inch up, but activity remains subdued

House prices inch up, but activity remains subdued

Category: Mortgages

Updated: 01/11/2011
First Published: 01/11/2011

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House prices inched up in October, but the property market in the UK remains subdued.

The average price of a home rose by 0.4% last month, up to £165,650, according to Nationwide Building Society.

But over the last 12 months, prices have proven to be resolutely stagnant, with the average value of a home increasing by just 0.8% since October 2010.

At the same point last year, a property in the UK would have cost £164,279.

Over the last three months, prices have fallen by 0.2% compared with the previous quarter period.

"Given the challenging economic backdrop, October's data is encouraging, but it doesn't fundamentally change the picture of a housing market that is treading water," said Robert Gardner, chief economist at the building society.

"Property transaction levels remain subdued, and prices essentially flat compared to last year.

"The outlook remains uncertain, but with the UK economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next 12 months."

The pattern of transactions has been fairly stable, but the data indicates that there had been an increase in the proportion of sales occurring in more affluent areas and a similar reduction in less affluent areas.

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