Property prices keep on rising

HOUSE prices have resumed their march higher after a brief pause, according to the Government's official property market index.

The Office of the Deputy Prime Minister said that house prices rose 12.1% in the year to October, up from 11% in September. Price rises were highest in the North-East at 26.5% and lowest in London at 6.2% although the figure was up on 5.4% a month earlier. The survey highlighted other hotspots as the North-West, Yorkshire and the Humber.

In Scotland, the average house price rose above £100,000 for the first time. The UK average is now £161,365 and a typical London house costs £244,242.

The average purchase price for first-time buyers rose from £123,372 to £126,803.

The ODPM house price survey was launched in September in response to criticism that a raft of house price data – produced by publicity-hungry lenders, surveyors and agents - might be distorting the decisions of buyers and sellers. The Treasury and the Bank of England backed calls for a definitive index.

Rivals have criticised the new survey because it works on data that is already two months old and only includes information on properties bought with a mortgage.

Recent surveys from Nationwide and Halifax have reflected a cooling property market. Halifax said prices only rose 1% in November compared with 1.4% in October. Nationwide said the increase slipped from 2% to 1.2%. The rises still reflect a market rising faster than a long-term annual average of around 5%. Nationwide figures show annual inflation peaked at 26.5% in January.

Both organisations believe rises will continue to rise next year. John Wrigglesworth, an economist at property information company Hometrack has said: 'There's more chance of finding Elvis on the moon than of a house price crash next year.'