House prices show increase

The average house price in Britain rose by 1.6 per cent in September, according to the latest figures from Halifax.

It was the third successive monthly increase recorded by the lender, with a 2.8 per cent increase over the third quarter of 2009, the first such improvement over a three-month period in exactly two years.

Halifax chief economist Martin Ellis commented: “The marked improvement in affordability due to the reduction in both property prices and interest rates since mid 2007 has been a key factor in stimulating higher demand.”

However, those looking for mortgages will not be hit by a surge in house prices, he suggested, arguing that increasing unemployment will act as a brake on them.

On the other hand, Mr Ellis predicted that buyers will have more choice as an increasing number of homes come on the market due to the encouragement sellers will gain from improving conditions.

The Halifax figures for the month follow on from figures provided by Nationwide showing a 0.9 per cent rise in prices last month.

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