Annual price growth reaches 11.3%

Annual house price inflation hit 11.3 per cent in October, according to the latest set of figures.

The Department of Communities and Local Government (DCLG) says that the average property was worth £220,195 in the month.

That is a monthly increase of just 0.1 per cent but is still good news for homeowners.

London recorded the largest annual price inflation, with property values rising by 17.7 per cent, while the south-east saw growth of 11.7 per cent.

Commenting on the index, Howard Archer from Global Insight said that the market appears to be cooling but a crash is not on the cards.

"While modest annual falls in house prices are highly possible in 2008 and prices seem set to remain pressurised for an extended period, at this stage we do not expect to see a sharp correction," he revealed.

"We believe that the downside for house prices will be limited by a lack of supply, the increasing number of households, high employment and the fact that few vendors are currently having to sell for 'distressed' reasons," continued Mr Archer.

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