LONDON (ShareCast) - House prices increased in October for the fourth month in a row, and are now 7.1% higher than where they were at their low point six months ago.
The cost of a home rose by 1.2% to £165,528 last month following a 1.6%
jump in September.
That's narrowed the year-on-year decline to 4.7% for the three months to October, down from 7.4% the month before. It peaked at 17.7% in April and now stands at its lowest since May 2008.
"Demand for houses has risen in recent months due to the very low level of interest rates, the decline in property prices since the summer of 2007 and a pick-up in consumer confidence on the back of better economic news," said Halifax housing economist Martin Ellis.
"Higher demand has combined with a low level of properties available for sale to result in rising house prices over the past few months."
But he thinks the recovery could begin to slow as the recent improvement in market conditions encourages more people to put their homes up for sale.
Howard Archer, chief UK economist at IHS Global Insight, said: "While house prices may well rise further in the near term from their early-2009 lows, we suspect that they they will be prone to significant relapses further out."
"Indeed, we believe house prices will be at least 5% lower at the end of 2010 compared to now, and would not be surprised if the slippage is greater still."
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