Region bucks national trend as house prices show drop of 1.4pc

The overall increase meant that the average home cost 167,423, a level last seen in August 2008, according to the Land Registry.

The group said it was the fifth consecutive month house prices had risen, although the annual rate of growth fell to 6.7 per cent, down from 6.8 per cent in July.

The figures contrast with a run of gloomy data on the housing market reported by other groups for August.

Nationwide said prices fell by 0.9 per cent during the month, while the Council of Mortgage Lenders said lending was at its lowest level for August for a decade, and HM Revenue & Customs reported a six per cent fall in transaction levels.

The Land Registry index tends to lag other indexes by around three months, as it measures prices at the end of the home buying process, so the latest downturn in the market is not yet being reflected in its data.

On a brighter note, the Land Registry reported a 17 per cent jump in property transactions in June, the latest month for which figures are available.

A total of 59,390 homes changed hands during the month, the highest level since December.

n A surprise jump in high street sales yesterday fuelled hopes that consumers are willing to heed the Bank of England’s message to spend not save.

The CBI’s distributive trades survey for September showed unexpected strength as the balance of retailers reporting that sales were up year-on- year climbed to a six-year high at plus 49 per cent, compared with plus 39 per cent in August.

It was the third consecutive increase and followed a decent month for clothing and footwear sales in particular, the business lobby group said.

Retailers also expect sales to be strong next month, but economists warned consumers are likely to find life much harder going forward as the public spending squeeze and rising food prices weigh on sentiment.

The official measure of retail sales also showed a much weaker picture during August.