House price inflation rises again

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House prices rose sharply in August, according to the latest monthly survey from the Department of Communities & Local Government (DCLG).

Prices rose by 1.6% in August, pushing the annual rate of house price inflation up from 6% to 7.7%.

The cost of the average UK property has now risen to £197,631.

Prices accelerated fastest in Northern Ireland, where they have risen 25.9% in the past year, with Scotland up by 12.8%, Wales 7.1% and England by 7%.

Of the four, Wales was the only area where the annual inflation rate dropped, slipping from July's rate of 7.4%.

The figures from the DCLG tell a similar story to all of the other main indicators of house market activity.

Both the Nationwide and Halifax surveys have shown similar price increases over the past year, interest from would-be buyers is strong according to the Royal Institution of Chartered Surveyors, and mortgage approvals are still high, indicating buoyant demand in the coming months.

Bungalow boon

The acceleration of prices in Northern Ireland has again made it the second most expensive property market in the UK.

COST OF AVERAGE PROPERTY, AUGUST 2006 England £205,556N Ireland £166,398Wales £158,028Scotland £145,490UK overall £197,631 Source: DCLG

The DCLG figures suggest that bungalows are the type of property most in-demand.

The cost of these shot up by 5.1% in August alone, followed by detached houses which saw their prices rise by 3.2%.

The average first-time buyer in the UK paid £152,172 for their property, the DCLG said, 6.9% more than a year ago.