House prices in 1st annual gain in 16 months

Asking prices for homes in England and Wales rose on an annual basis for the first in more than a year in October, property Web site Rightmove said on Monday, buoyed by a dearth of properties coming onto the market.

Asking prices rose 0.2 percent on the year - the first annual rise since June 2008 - taking them to an average 230,184 pounds.

On the month, asking prices rose 2.8 percent, the biggest increase since February 2008 and the largest for a month of October in six years, Rightmove said.

Other recent surveys have also shown house prices are rising again on a monthly basis, but the trend has mostly been driven by a lack of supply as homeowners prefer to sit out the downturn rather than accept a lower price for their property.

"Current price recovery is based on an unusually thin market with transaction levels still 54 percent down on 2007" Rightmove said. "Ongoing lack of supply is driven by home owners deciding not to move given the current economic backdrop."

Rightmove said London led October's gains, with prices up by 5.2 percent on the year and 6.5 percent on the month, taking the average asking price to a record high of 416,157 pounds.

"Lack of fresh stock is the driving factor behind this record high" Rightmove said.