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UK residential property prices still on the up, two of the latest indices show

Prices were up 0.6% in October according to figures from the Land Registry and up 0.2% in November according to housing intelligence group Hometrack.

It is the fifth monthly rise in a row from the Land Registry which puts the average house price at £159,546 and shows that prices are 3.4% lower than they were the same time last year. The biggest rise was 1.9% in north west England and the steepest fall was 2.3% in Wales.

Average house prices in London grew at over £4,000 whilst Wales witnessed price falls of over £2,000.

The Hometrack survey has now recorded its four monthly increase but it shows prices are 2.9% lower than they were in the same month last year.

According to Oliver Gilmartin, economist at the Royal Institution of Chartered Surveyors prices are set to rise further in the coming months supported by an ongoing shortage of property listings relative to demand.

But he did warn that 2010 will still be challenging time for the real estate market.

‘Renewed challenges are set to face the market in 2010 particularly in some regions where unemployment will remain elevated.

In particular, the ending of the extended zero band on stamp duty in the new year could have a disproportional impact on those markets outside London and the South East,’ he explained.

Hometrack said the upward trend has been driven by rising demand and it warned that there were signs the rush of potential buyers coming to the market was beginning to falter. ‘New buyer registrations grew by just 0.1% in November, the lowest level since the start of the year.

A decline in demand is inevitable in the run up to Christmas but there are signs that the upward pressure on prices is likely to decline in the months ahead,’ said Richard Donnell, director of research at Hometrack.

He added that the recent pick up in prices and activity had not been seen across the whole country.

‘The stark reality is that there are large swathes of the country where prices have remained unchanged or have seen continued price falls,’ he added.

Prices rose by 0.4% in London during November and by 0.3% in the South West, but all other regions saw gains of just 0.1% or no change. Overall, only 17.6% of postcode areas saw increases during the month.

The group said prices were now higher than they had been six months ago across only 37% of the country, with London and the South East most likely to have postcode areas where prices were now higher at 78% and 50% respectively.

Consultancy Capital Economics is predicting that the rise in prices of the past few months would soon run out of steam.

‘The shortage of available property may mean that prices continue to increase in the near-term, but with employment set to fall further, we expect house prices to resume their downward trend in 2010,’ it said.