FT: House prices up 0.3 per cent

Friday, 12 October 2007 12:00 AM

House prices were up by 0.3 per cent in September, according to a new study released by the Financial Times today.

Despite the widespread gloom forecast by the Royal Institution of Chartered Surveyors and the Halifax Building Society, Acadametrics - the organisation behind the FT survey - found prices had continued to rise.

Growth, however, was down from 0.4 per cent in August.

The average house price across England and Wales is now £225,826, up from £225,100 a month ago.

Annual house price inflation now stands at 8.8 per cent, based on a three month average, down from 9.4 per cent in August and 9.5 per cent in July.

"The continuing fall in both the monthly and the annual inflation rate was expected and begins to suggest we will now see a period of further reductions in the rate of price increases, following the broadly stable pattern which we have observed in the first few months of the year," commented chairman of Acadametrics, Dr Peter Williams.

"In the last six months, average house prices have gone up around 2.5 per cent compared to over five per cent in the previous six months i.e. the rate of increase has halved."

Annual house price inflation was highest in London, where average price growth reached 17.1 per cent.

Among the London boroughs, the City recoded the highest growth levels, with average prices up 39.1 per cent, followed by Islington and Kensington & Chelsea, which recorded growth of 26.8 and 24.6 per cent respectively.

Elsewhere in the country, the south-west and south-east both saw impressive growth, of some 9.7 and 9.2 per cent respectively.

The West Midlands and north were among the worst performing, with the former recording average house price growth of 4.4 per cent and the latter seeing prices rise by 4.7 per cent.

"The expectation of a slowing market through the remainder of 2007 remains regardless of any decisions by the Bank of England," concluded Mr Williams.

"Indeed, the Bank's previous increases in interest rates have now collided with the tightening in mortgage credit resulting from the sharp increase in mortgage arrears and possessions and loss of confidence in mortgage backed securities in the US market and, to a lesser extent, in the UK."

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