House prices go up by ?65 a day

House prices are continuing their upward march, rising by 1.5% - or £65 a day - last month, Britain's biggest mortgage lender said yesterday.

The average UK home saw £1,960 added to its value in September, according to the Halifax. The rise underlines the renewed strength of the property market and defied observers who have been forecasting a downturn.

Even Capital Economics, which has been predicting sharp price falls in the coming months, yesterday appeared to moderate its message.

Its property economist, Ed Stansfield, said given the momentum still present in large parts of the market, it "seems likely that national average house prices will continue to rise for the next six to nine months". But it predicts a double digit fall in prices over the next few years.

The typical home is now worth £135,958, said the Halifax. This is 18.6% more than a year ago, when the average value was £116,663.

September's 1.5% rise was the biggest since May and "underlines the strength of the market", said the lender.

Every region of mainland Britain, including London, enjoyed price growth during the July to September period, with Yorkshire and the Humber (up 5.3%) and Scotland (up 4.9%) leading the way.

Prices in London increased by 2.1% during the third quarter, cancelling out the 0.7% fall in the second quarter. However, the annual rate of house price growth in the capital has slipped to 8.6% - the first time the figure has been below 10% since the start of 2001.

By contrast, annual house price growth in the north of England is now running at 37.6%. "A combination of low interest rates and high employment levels continues to support housing demand," said Martin Ellis, chief economist at the Halifax.

The lender's outlook broadly chimes with that of Nationwide, which said earlier this week that property prices rose 1% in September, indicating a "relatively buoyant" market.