Halifax: House prices up 1.6% in September

Tuesday, 06 October 2009 10:11

House prices rise 1.6 per cent in September, according to new data from the Halifax.

The lender now puts the average house price down 7.4 per cent from a year ago to £163,533.

This compares to data from Nationwide last week showinga 0.9 per cent increase last month and no change from a year ago.

Martin Ellis, Halifax housing economist, said the rises were due to increased demand, with improvements in affordability, chasing a limited number of homes on the market.

However, he warns this rise in demand may be short lived, as could be the shortage of new homes hitting the market.

"Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand," he said.

"There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale.

"This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months."

David Smith, at property consultancy Carter Jonas, said with effects of the recession still to be felt, homeowners looking to sell might be better making a swift move now.

"We have to expect more turbulence ahead, especially given rising unemployment and the fact that, at some point, interest rates will have to rise," he said.

"At that time, the current price revival will likely plateau or even go into reverse, albeit temporarily."

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