House price rises slow but demand still growing

House price rises are easing slightly, according to the latest Halifax House Price Index.

Prices were 8.6% higher in the three months to September than in the same period last year. That compares with the 9% year-on-year increase in the three months to August.

The index also revealed that in the three months to September, prices were up by 2% on the previous three-month period, compared with the 3% rise in the three months to August.

Between August and September prices actually fell, with the average house now costing £202,859 compared to £204,722.

However, Martin Ellis, Halifax’s housing economist, said he saw no reason to expect house price rises to continue to ease.

He said: “Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates.

“Increasing demand is combining with very low growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months.”

Separate research by the Halifax also showed that there has been a 60% increase in the average price of a flat over the past ten years – significantly higher than the 38% rise for all residential properties.

The research showed that detached homes and bungalows have recorded the slowest rises over the past decade – at 21% and 28% respectively.

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