Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.


Big rise in property prices seen as a blip by Halifax

House prices increased on average by more than £1,300 to £86,300 last month, the Halifax said yesterday.

House prices increased on average by more than £1,300 to £86,300 last month, the Halifax said yesterday.

The 1.6 per cent rise reported by Britain's biggest mortgage lender was the highest since January and far greater than the increase given in figures from the Nationwide Building Society earlier this week. The Halifax said the rate of annual house-price inflation climbed to 8.2 per cent in September, up from 7.4 per cent, while the Nationwide's figures showed the annual rate easing.

However, the two lenders were agreed that the housing market had steadied, and both showed year-on-year rates of increase well below their peaks earlier this year. Current price increases should give the Bank of England nothing to worry about when it votes on interest rates this morning, economists said. The bank's monetary policy committee is expected to leave the interest rate at 6 per cent.

"Overall, the latest monthly figures suggest that the housing market has stabilised following the sharp slowdown earlier in the year," the Halifax report said. "The rise in September is unlikely to mark areturn to rapid house-priceinflation."

The report predicted this would slow further to 4 per cent by the end of next year. The Nationwide is forecasting a similar slowdown, with a forecast of a 7 per cent house-price inflation rate by this December.

Both sets of figures can show a good deal of volatility from month to month depending on the location and quality of the properties on which the two lenders are issuing mortgages, and the number of transactions they record.

Economists agree with the picture of a calmer market after an overheated spring. Neil Parker, an economist at the Royal Bank of Scotland, said the Halifax figures for September were a one-off given other signs that calm was returning to the market, especially in London and the South- East. "The housing market has undoubtedly come off the boil."