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House prices rise again

House prices rise again

Category: Mortgages

Updated: 27/01/2010
First Published: 03/11/2009

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Property prices rose for the fourth month in succession in October, and are now 7.1 per cent higher than they were six months ago.

The value of property in the UK increased by 1.2 per cent last month, with house prices in the three months to October improved by 2.9 per cent on the previous three months, according to the Halifax House Price Index.

The average home finished October worth £165,528, a similar level to November 2008.

"Demand for houses has risen in recent months due to the very low level of interest rates, the decline in property prices since the summer of 2007 and a pick-up in consumer confidence on the back of better economic news," said Martin Ellis, housing economist at the Halifax.

"Higher demand has combined with a low level of properties available for sale to result in rising house prices over the past few months."

The average house price has risen by the same margin (2.9 per cent, which is equivalent to £4,667) since December 2008, and 7.1 per cent (equivalent to just over £11,000) in the past six months since prices reached a low point in April earlier this year.

This recent improvement follows the significant decline in the mortgage market between August 2007 and April 2009, when almost UK homes had almost a quarter of their value eroded.

This upturn in prices also means that the annual rate of change, which was measured at -17.7 per cent in April, has slowed markedly to -4.7 per cent.

"There are some indications that more people are deciding to put their homes on the market, encouraged by the recent improvement in market conditions," added Mr. Ellis

"A continuation of this trend could help to improve the balance between supply and demand, curbing the strength of the stimulus to house prices resulting from the current imbalance."

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