Fifth consecutive rise in house prices

House prices in England and Wales rose for the fifth month in a row during October, figures showed today.

The average cost of a property increased by 0.6% during the month, to leave prices at their highest level since November last year, according to the Land Registry.

The rate at which prices are falling year-on-year also declined for the sixth consecutive month, easing to 3.4%, the lowest level since July 2008, and down from 5.4% in September.

But the figures showed there was a slight dip in the number of homes changing hands during August, the latest month for which data is available, as the market suffered its traditional summer slowdown.

There were 53,236 transactions during the month, down from 59,691 in July and ending a six-month run of rising sales levels, although the figure was still 11% higher than in August 2008.

All regions of England except the West Midlands saw price rises during October. Prices in Wales fell 2.3% and the West Midlands by 0.6%.

Five regions saw rises of more than 1%, with the North West leading the way with a 1.9% gain, followed by the South East and South West, both at 1.5%.

In London, house prices were broadly similar to where they were in October 2008, at just 0.2% lower, but in all other regions they are at least 1% down on levels seen 12 months earlier, with the West Midlands posting the biggest annual drop at 6.3%, followed by Wales at 6%.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said: "There remains a wide variation in the strength of the pricing recovery between the regions.

"Average house prices in London grew at over £4,000 during October, while Wales witnessed price falls of over £2,000.

"House prices are set to rise further in the coming months supported by an ongoing shortage of property listings relative to demand."

But he added that the market would continue to face challenges during 2010 due to the high level of unemployment and the end of the Government's stamp duty holiday on properties costing up to £175,000, which will have a disproportionate impact on areas outside of London and the South East.

Kelvin Davidson, property economist at Capital Economics, said: "The latest Land Registry data show that the regional picture of house prices remains patchy, though at the aggregate level prices rose again in October.

"The shortage of available property may mean that prices continue to increase in the near-term, but with employment set to fall further, we expect house prices to resume their downward trend in 2010."