The UK house price inflation rate fell from 13.8 per cent in September to 12.6 per cent in October. Prices between September and October rose by 0.7 per cent but annual inflation fell due to prices rising by 1.8 per cent over the same period last year.
The mix-adjusted average house price stood at £180,444 for October up from the September figure of £179,201.
The inflation rate for first-time buyers fell over the month from 15.6 per cent to 12.5 per cent. The average price paid by first-time buyers across the whole of the UK was £143,847 in October, while the average price paid by former owner-occupiers was £200,275.
Peter Gladdy, director of Mortgages Direct, said: “The slowdown in house price inflation recorded by the ODPM in October confirms the cooling effect that five interest rate rises have had on the housing market.
“Data from across our network shows that the difference in asking and achieved prices has been narrowing over the last few months as house prices return to more sensible levels. We are anticipating house price growth of 3 per cent during 2005.”
David Bexon, chief executive of SmartNewHomes.com, said: “The figures from the ODPM reflect what our own data has been showing over recent months, that the housing market is slowing but will not crash.”
The Office for National Statistics said that inflation remains well below the Bank of England’s 2 per cent target but the figures are still likely to boost expectations that the bank may have to raise interest rates at least once more next year.
