Published on : Tue, 22 Nov 2005 12:28GMT
by : Lucy Andrews

LONDON - The annual house price inflation in the UK increased to 3.3 percent in September as compared to the 2.8 percent rise recorded in August. This figure is well above analysts expectations of 3.0 percent.

The latest figures released by the Office of the Deputy Prime Minister (ODPM) and the property website Rightmove, show that the housing market is well and truly on the road to recovery.

The ODPM figures confirm that the average price of a home in Britain now stands at £186,723 as compared to £186,208 recorded in August. The north-west recorded the highest increase in house prices with a 7.9 percent increase, while Yorkshire and the Humber recorded a 7.1 percent increase.

The lowest rises as expected were in the south west of the country. The ODPM said that the house prices were boosted by a 1.6 percent increase in the average price of a detached home. The August rate cut by the Bank of England has also helped the property market get a move on.

Commenting on these figures, Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors said, "House price rises have slowed from a high of 14.3% in July 2004, due to the impact of rising interest rates last year, but a firm labour market and the recent interest rate cut have helped reverse the declining trend." He added that the housing market was "firming up."

Meanwhile, another survey by property website Rightmove said that the average price of a house in England and Wales increased by 0.8 percent to £197,855 in the four weeks to November 12. Rightmove, which assesses the asking price of 132,000 homes, said that the house prices had increased by 4 percent year-on-year, up from the 1.5 percent recorded in October.