House prices rose for the sixth month in a row during September, jumping by 1.2%, Government figures showed today.
The rise pushed the average cost of a UK home up to £199,303, a level last seen in November 2008, according to the Department of Communities and Local Government.
The annual rate at which prices are falling also eased for the sixth consecutive month to 4.1%, the lowest level for 13 months.
The figures came as the Royal Institution of Chartered Surveyors (RICS) said house prices continued to rise during October despite an increase in the number of homes being put up for sale.
The group said 34% more surveyors reported seeing price rises rather than price falls during the month, the highest level since December 2006.
The increase reported by RICS came despite evidence that sellers are beginning to return to the market, with a balance of 15% of surveyors reporting a rise in instructions, up from just 5% in September.
The group said the number of people looking to sell their home rose in all regions of the UK for the first time since the credit crunch struck.
But despite this, the average number of unsold properties chartered surveyor estate agents had on their books remained broadly unchanged for the third consecutive month at 64.
Economists have attributed the recent strength of the housing market to a shortage of homes for sale and they have warned that, as more properties are put on to the market, prices could start to fall again.
But surveyors expect house prices to continue rising over the coming three months, with 31% more expecting a rise rather than a fall in the value of property, up from a balance of 25% in September.
RICS spokesman Jeremy Leaf said: “Although the supply of property is beginning to pick up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term.
“Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders.”
CLG reported a slowdown in the annual rate at which house prices are falling during September in all regions of the UK except Wales and Northern Ireland, while the rate remained broadly unchanged in Scotland and Yorkshire and Humberside.
Price falls continue to be slowest in Scotland, with the average value of a home dropping by just 0.9% during the year to the end of September, while they are greatest in Northern Ireland at 18.3%, up from an annual slide of 12.7% in August.
The Government figures also showed that first-time buyers are now paying only 1.3% less for a property than they were in September 2008, although the price of homes bought by former owner- occupiers is 5.2% lower.
RICS reported a further rise in transaction levels in its survey, with the average chartered surveyor estate agent selling 19 properties during the three months to the end of October, up from 18.5 during the three months to the end of September.
But the rate at which potential buyers are registering with estate agents slowed down for the fourth month in a row.
