More evidence of rise in house prices

Annual house price inflation increased for the third consecutive month in October, according to the latest industry survey.

Halifax has echoed Nationwide?s report earlier this week that prices are picking up, but both building societies agree that the housing market is not in line for another boom.

The Halifax survey revealed that prices are 3.9 per cent up on a year ago, compared to September?s rate of three per cent.

Martin Ellis, chief economist at Halifax, said: "The overall pattern of price movements over the past few months shows that the market has strengthened compared with earlier in the year, but the static level of prices in October suggests that we are not poised for another sustained period of sharply rising property values."

He said housing demand was being fuelled by "continuing economic growth, the high level of employment and a boost to household sentiment regarding the future direction of interest rates following August's base rate cut".

However, he added that the slowdown in UK economic growth and the high level of house prices relative to average earnings are likely to curb the recent improvement.

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