But prices in the three months to October were 1.2% lower than in the preceding three months, which Halifax provides a clearer indication of the overall market trends, smoothing out the volatility caused by the reduced number of monthly transactions in all house prices indices’ monthly figures.
October prices were 2.3% lower than at the end of 2009 on a seasonally adjusted basis (-1.2% unadjusted).
Annually, house prices are still seeing inflation with October 1.2% higher on an annual basis as measured by the average for the latest three months against the same period a year earlier. This continues the recent downward trend from a high of 6.9% in May.
Martin Ellis, housing economist at Halifax, said: "There has been a very mixed picture of monthly house price rises and falls throughout 2010, which continued in October with prices rising by 1.8% following September's decline, reflective of flat house prices.
“The rate of decline in prices on the three month-on-three month measure is markedly less than the quarterly declines of more than 5% recorded during the second half of 2008.
“An increase in the number of properties available for sale in recent months, together with a decline in demand, has put some downward pressure on prices in recent months.
“We do not believe that prices are set to fall sharply over a sustained period. Interest rates are likely to remain very low for an extended period, which will continue to support the improved mortgage affordability position for homeowners. Low rates and stable employment levels are benefiting homeowners."
And Brian Murphy, head of lending at independent mortgage broker, Mortgage Advice Bureau, added: “Following on from the 3.6% decline in September, the October Halifax figures are proof positive that you should never read too much into monthly house price data.
"The extreme volatility we are seeing in the house price indices reflects the reduced number of transactions, which accentuates any movements in the property market.
"We believe house prices are unlikely to fall much further as long as interest rates remain at current levels but when rates and unemployment rise, the market could see a further deterioration."
