British house prices grew a seasonally adjusted 1.2 per cent last month from September, the smallest rise since June, to stand 16.7 per cent higher in the latest three months from a year earlier, leading mortgage bank the Halifax said today.
The figures compare to an upwardly-revised increase of 1.6 per cent for September which gave an annual rate of 18.6 per cent. The average price for a house in Britain is now £137,780.
"House prices are now 16.7 per cent higher than a year ago showing that the housing market remains strong and is still underpinned by strong fundamentals," said Mr Martin Ellis, the company's chief economist.
He added he thought that a widely expected interest rate hike by the Bank of England's Monetary Policy Committee later this week would have "only a modest impact on the housing market."
British house prices have increased dramatically in recent years driven by a combination of falling interest rates, rising incomes and employment.
The market had been showing signs of slowing down earlier this year but the Bank of England's rate cut in July, which took the cost of borrowing to a 48-year low of 3.5 per cent, seems to have breathed new life into it recently.
Last week, for example, the Nationwide Building Society released its own house price index showing prices jumped 2 per cent last month, the strongest for 14 months, to stand 16.1 per cent up year-on-year.