UK house prices retreated at a 0.2 per cent month-on-month pace during October and by another 0.4 per cent versus the same month a year ago, according to the latest data out from Hometrack.

The latter was the smallest decline seen in two years.

Nevertheless, for Richard Donnell, Hometrack's director of research, "The foundation of any national and sustainable recovery in the housing market rests on growth in the wider economy and household incomes ... [Demand for homes is] likely to slow down in the run-up to the year-end with agents looking to push through as many sales as possible."

A measure of demand for homes increased 0.3% in October versus the previous month, on the back of a 3.9% surge in London. Sales jumped by 9.2% as prices of old housing stock were lowered, it said.

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