Halifax: UK house price growth eases to 8.6% but demand continues to soar

The annual growth of UK house prices has eased to 8.6% in September, slightly down from 9% in August, according to the Halifax house price index. The growth, still significant, is on the lower end of 2015 increases.

Quarterly change was 2%, down from 3% in the previous three months, as house prices continue to grow but additional supply is offered to the market, although it is still far from enough to move towards stabilisation.

Martin Ellis, Halifax housing economist, said that the demand for housing in the UK is continuing to grow as the domestic economy is recovering, wages are up and, for now, interest rates are still at an all-time low.

"Increasing demand is combining with very low supply to drive robust underlying house price growth," he said. "There is little reason to expect any fundamental shift in the key market drivers over the coming months."

Other economists have said that the Halifax inflation calculation differs too much from others. Howard Archer, economist at IHS Global Insight, commented: "The Halifax data have been notably more volatile than other house price measures in recent months and much stronger overall than most. Annual house price inflation on the Halifax measure was still more than double the Nationwide's annual house price inflation of 3.8% in September.

"This highlights the need to not pin too much weight on one particular house price survey or measure, but to try and take an overall view from the data," he added. "Nevertheless, the marked correction in house prices reported by the Halifax in September after August's spike may dilute any concerns that house prices could gain excessive momentum."

Although house indices might differ when it comes to specific growth rates, economists agree across the market that house prices are expected to continue to surge, with the consensus being a 5% rise in 2016.

Especially in London, house prices are steep. According to the Confederation of British Industry, the average house price in the capital has soared by more than 90% since 2005.