House prices continue to rise

The housing market showed further signs of life today after prices rose for the second month in a row during August.

The continuing shortage of homes for sale helped push the average cost of a property in the UK up to £160,973, broadly in line with where prices were at the end of last year, according to Halifax.

There was also a further fall in the annual rate at which prices are declining, with this easing to 10.1%, the lowest figure since July 2008.

Martin Ellis, housing economist at the Halifax, said: "The average UK house price rose by 0.8% in August. This was the second successive monthly increase and the fourth in the first eight months of 2009. Overall, house prices nationally are very similar to the level at the end of last year.

"Demand for housing has increased since the start of the year due to better affordability and low interest rates. This, together with low levels of property available for sale, has boosted prices over the last few months."

Steve Morgan, chairman and founder of housebuilder Redrow, said: "All the indicators suggest the market is on the way to recovery but I don't see it as a V-shaped recovery at all. There is a lot of things going on in the economy as a whole, unemployment being the major factor, suggesting it will be a long, hard slog."