Housing market slows after five months of growth says the Department for Communities and Local Government (DCLG)

Published 17th Dec 2009

The housing market rally appears to be running out of steam, with the pace of price rises starting to slow, according to official figures out on Tuesday.

Prices rose for the fifth month in a row, by 0.5 per cent in October, the Department for Communities and Local Government (DCLG) said. However, the rise was smaller than the 1.2 per cent recorded in September. At £198,450, average house prices were 2.2 per cent lower in October than in October 2008, according to the DCLG index, which lags other measures because it is based on mortgage completions, rather than approvals.

The annual fall was 2.1 per cent in England, 4.5 per cent in Wales and 14.8 per cent in Northern Ireland in October, with consecutive monthly gains since spring wiping out part of the steep falls that homeowners experienced throughout 2008. Prices rose in Scotland by 0.7 per cent on average over the year to October.

Separate figures published by the Royal Institution of Chartered Surveyors showed that house prices and demand for property were still rising but that more new property was beginning to come on to the market, a trend that is expected to add downward pressure to prices.

Zoopla!, a property website, has calculated that the average property value has risen by £4 a day in 2009, compared with a loss of £86 a day last year.

• Lending to homebuyers continued to increase as a proportion of all mortgage lending, up to 57 per cent in the third quarter of 2009, against 50 per cent over the previous three months, the Financial Services Authority reported. Total gross lending reached £40.3 billion, up by 17 per cent from £33.5 billion in the second quarter.

Source: ' Times '

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