House prices still levelling off

House prices in England and Wales rose by just 0.1 per cent last month in a sign that the housing market is continuing to soften, the Land Registry has revealed.

The latest house price index from the government department has, however, revealed considerable price divergence across the country.

House prices in Wales rose by two per cent in October, the study found, but London –for so long this year the bedrock of price growth – saw a 0.6 per cent fall over the same period.

Analysts have suggested that growth rates in the capital are indicative of wider trends.

"We think it is most likely that house prices will essentially flatline for an extended period. Even so, this would still represent a fall in house prices in real terms and modest nominal falls in prices are highly possible," said Howard Archer from Global Insight.

Mr Archer did, however, predict that strong fundamentals would bolster the housing market in 2008.

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