Housing market still struggling

Martin Ellis, housing economist, said: "Signs of a modest deterioration in the trend in house prices continued in October.

The weak economic background has been a key factor dampening housing demand this year. Recent encouraging developments relating to the level of overall economic activity and conditions in the labour market, however, may help to support demand and underpin house prices around current levels over the coming months."

Key facts

* House prices in the three months to October were 1.2% lower than in the preceding three months. This was the fifth successive decline in this measure of the underlying trend and compared with a 0.5% fall in September;
* Prices in the three months to October were 1.7% lower than in the same period a year earlier. This is very similar to the annual rate recorded a year ago: -1.8% in October 2011;
* House prices decreased by 0.7% in October;
* Modest rise in mortgage approvals continues. The industry-wide number of mortgages approved to finance house purchase – a leading indicator of completed house sales – increased for the third successive month in September. Approvals increased by 4% to 50,000 in September, but were still 2% lower than in September 2011;

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