Fresh figures released by the DCLG reveal that average UK house prices in June 2006 were up 5.2%, compared to the same time last year, 5.6% in April 2006 (compared to April 2005) and just 1.6% in October 2005 (compared to the same time in October 2004).

Davis Stubbs, RICS Economist comments: "While the pace of house price inflation on the governments official measure has slowed somewhat, significant momentum remains in the market which has strengthened consistently since last Augusts interest rate cut. The ODPM figures are based upon 45,000 completed property purchases per month from about 50 mortgage lenders.

"House price rises remain strongest in Wales, Scotland and Northern Ireland. Northern Ireland is the only location to still be recording double-digit house price rises. However, price rises across southern England, despite a slight slowing this month, have accelerated over the past six months. Falling prices last autumn have been replaced with moderate price rises of between 4% and 6%. The East and East Midlands have the weakest markets with prices growing at under 3%.
"The number of new mortgage approvals increased again in June to 120,000, and have averaged 115,000 per month during 2006. This is well above the historical average of around 100,000, indicating that housing market conditions are good, underpinned by a stronger economy this year. Moreover, RICS estate agents have reported that good trading conditions in June have continued in July, despite the hot weather and the onset of the school holidays. This points to house prices continuing to show modest rises into the second half of 2006, despite this months interest rate increase."