House prices rose 1.8 per cent in October, the biggest monthly rise since the spring of 2009. Does this mean the house price slump of late 2010 is over? Not on your Nellie.

In fact, after falling 3.6 per cent last month, the biggest monthly fall ever recorded by the Halifax, it would have been a real surprise if October didn’t seen some kind of bounce back. Indeed, this column said as much before, describing the September fall as rather “freakish looking”.

Martin Ellis, housing economist at Lloyds said: “Prices in the three months to October were 1.2% lower than in the preceding three months. This measure gives a better indication of the underlying trend in house prices than the monthly changes. There has been a very mixed picture of monthly house price rises and falls throughout 2010, which continued in October with prices rising by 1.8% following September’s decline, reflective of flat house prices. The rate of decline in prices on the three month-on-three month measure is markedly less than the quarterly declines of more than 5% recorded during the second half of 2008.”

He is right, house prices are not falling like they were in 2008. But then again, during the recession, thanks to lower interest rates, the average household was no worse off after debt payments than at the peak of the boom. It is not like that now, and household income is looking decidedly stretched.

If you missed these articles, see: House prices second dip gains momentum , and The US and UK economy may be growing, but households are suffering a nasty hit , which were published earlier this week.

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