House Prices Defy Gloomy Predictions

House prices have risen by a further 1.2%, surprising property market specialists. After prices rose in August, analysts predicted September?s figures would reverse this trend but Halifax?s latest House Price Index proves that this is not the case. The news comes soon after Hometrack?s September report showed that buyer activity increased by 5.5% (4.1% in August's survey) suggesting buyer confidence is improving. John Wriglesworth, Hometrack's Housing Economist, commented: ?House prices are continuing their bumpy path towards more affordable levels, and this has helped buyers come back to the market over the summer.' But Halifax?s latest report indicates that this improved buyer confidence is already helping the market. ?The pick-up in monthly house price inflation in August and September is consistent with the rise in market activity over the past few months,? said Martin Ellis, Chief Economist for Halifax. ?Healthy household income growth and historically high levels of employment are supporting the housing market and the Bank of England's decision to cut interest rates in August also appears to have given the market a boost? he continued. Property economists warn that this unpredicted house price rise does not necessarily herald a new bout of accelerating house price inflation. House prices are still increasing at a slower rate than they were this time last year and other house price reports such as Hometrack, do not support the idea that house prices are recovering. ?The reduction in economic growth this year and the continuing high level of house prices in relation to average earnings are expected to constrain housing demand and prevent a sustained surge in house prices?, said Ellis.