House prices on the increase

The housing market seems to be picking up as property prices increased by 1.2 per cent in September.

The overall gain in the last three months is 1.8 per cent, making it the biggest quarterly rise for a year, according to the Halifax bank.

The increase can be partly put down to the Bank of England's rate cut in August, however the three per cent annual increase in growth is well down on last year's 20.5 per cent.

The surge in house prices this quarter was led by North England with a 6.6 per cent rise recorded by Halifax.

Price trends in London reversed with a 3.8 per cent rise, following recorded falls in the last four quarters.

But, Halifax chief economist, Martin Ellis, says these latest figures do not indicate resurgence in booming house prices.

"The reduction in economic growth this year and the continuing high level of house prices in relation to average earnings are expected to constrain housing demand and prevent a sustained surge in house prices," he said.