234: House price inflation at 18-month high
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LONDON (Reuters) - House prices rose at their fastest annual rate in 1-1/2 years in September, with prices in London continuing to lead the way, government data shows.
The Department for Communities and Local Government said house prices rose 8.0 percent year-on-year in September compared with a downwardly revised 7.4 percent in August -- the highest since March 2005.
That took the average house price up to 198,552 pounds in September from 197,009 pounds in August.
Annual house price inflation in London accelerated to 9.0 percent from 7.6 percent in August -- also an 18-month high.
The figures chime with surveys from mortgage lenders Halifax and Nationwide that show housing market activity has not been dampened by higher borrowing costs.
And analysts said if last week's interest rate rise to 5 percent did not cool the market, policymakers would be tempted to raise rates again early next year.
"The ongoing buoyancy of house prices will be of significant concern to the Bank of England. Indeed, if house prices continue to post sharp rises over the coming months, it will increase pressure for the Bank to lift interest rates further in 2007," said Howard Archer, economist at Global Insight.
Source:
Reuters.co.uk