House prices up by 4.6 per cent

This compares to an annual increase of 11.82 per cent for the same period last year.

The report compares average prices and volume of sales with those for the same quarter in 2004. It also gives a breakdown of the average sale prices of old and new properties by property type.

The average house price in England and Wales was £191,327, and annual sales were up by 12.6 per cent, compared with the same period in 2004. Sales in Greater London increased by 15.01 per cent.

A rise in the number of high value home sales helped raise the average price of property sold at the end of last year – 521 properties over £1 million were sold in London in the third quarter of 2005 compared to 436 for the same period in 2004. And 948 properties over £1 million were sold in England and Wales compared to 765 for the same period in 2004.

The Royal Institution of Chartered Surveyors (RICS) is not surprised by the increase. The RICS housing market survey, as well as house price data from mortgage lenders detected a strong market months ago.

The Land Registry figures lag behind these other measures because they are based upon completion prices, which are recorded several months after sales have been agreed.

“While these figures show a slight fall in prices in quarter four, the market did actually perform well during a period of the year that is know for being seasonally weak,” says RICS economist David Stubbs. “Northern regions in England performed best with annual price rises accelerating in the fourth quarter ensuring continued out performance in relation to regions in the south”

The large pick up in activity seen in mortgage approvals has now fed through to completed transactions, according to RICS data. Completed transactions rose by 12.6 per cent in quarter four from levels a year ago, compared to the drop seen in quarter three (down 15.4 per cent against quarter three 2004).

Stubbs says that this was not surprising, as the number of mortgage approvals has doubled in the past 12 months and buyer enquiries have been rising according to the RICS housing survey for seven months.

In regional terms, the South West saw the largest rise in transaction volumes, 20.5 per cent more properties sold in the fourth quarter of 2005 than a year earlier.

The North West saw the smallest rise with transaction levels only 2.8 per cent higher than the same period in 2004.

Stubbs says: “RICS expects the upturn in housing activity to be sustained, supported by a recovery in economic growth and a possible interest rate cut in the coming months. However, a continued weakening in the labour market in the coming quarters would begin to undermine high activity levels especially if a resurgent oil price and other factors limit the room of the Bank of England to cut interest rates in response.”