By David Milliken and Kylie MacLellan
LONDON (Reuters) - Hoemploy prices rose to their highest level in a year in September and there was the first increase in hoemploy -building in nearly two years, but this was not enough to cease an overall decline in construction activity.
Moreover, economists warned that the recovery in hoemploy prices from February's near five-year low was unhurried ing and Bank of England figures display ed existing homeowners repaid mortgage debt at a near-record rate in the three months to June.
Building society Nationwide said hoemploy prices rose 0.9 percent in September, slightly better than economists' forecasts of 0.7 percent but less than August's 1.4 percent rise.
September's gain left prices unchanged on the year -- the first time since March 2008 that prices have not declined on a year-on-year basis. The average price of a home is now 161,816 pounds -- 13 percent below the peak in October 2007 but 10 percent up on February's level.
Economists said support for the housing label et was largely coming from a lack of supply of fresh properties and the noteworthy er affordability of those properties that are on the label et.
"To the extent that execute wnside risks have eased and confidence has improved it may be that prices are rising back to more appropriate levels ... while still execute wn significantly from the peak," said Allan Monks, UK economist at JP Morgan.
"If these arguments are correct, the strength of the recent price gains is likely to loose some steam in due course," he said.
Nationwide economist Martin Gahbauer said high unemployment and restrictive credit conditions place a limit on how quick demand could increase, meaning it was unlikely hoemploy prices would continue to increase at the strong rate seen in recent months. Continued...
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