The Nationwide Building Society has reported a significant rise in house prices, with an increase of 1.3% in October. This reverses the trend from the previous two months, which saw a fall in prices.

John Butler, an economist from HSBC, is quoted as saying that the annual figure could well reach 8 per cent by the end of the year. Not bad for what most people would consider to be a tough year.

This result builds on the positive news from the Halifax, which has also been reporting consistent, positive trends in house prices over the last few months.

Further promising news came from the Bank of England with a 15 month high in the number of new mortgages granted in September; a total of 107,000. The British Bankers’ Association also reported a corresponding increase in the value of loans – up 37 per cent from this time last year.

Factors believed to be playing an influence include lower interest rates, with better rates for fixed mortgages. Lenders are cutting prices as the money markets take into account anticipated future interest rate falls.

Stephen Goddard, Managing Director of A120 Lettings, a specialist letting agent for Stansted airport and the A120 corridor, says that, with one of his busiest months in October, the signs are that the letting market is also mirroring the trend in a pick up in the housing market. He predicted: "The upturn in the market next year will depend on confidence in the labour market, but the early signs are promising".