House prices continue to 'tread water'

House prices continued to "tread water" last month with a 0.1 per cent rise, according to the mortgage lender Nationwide. But separate figures from the Bank of England showed that mortgage approvals for house purchases hit a 20-month high.

The typical cost of a home was £166,256 – up from £165,914 in August, but 0.3 per cent lower than September 2010.

A slew of cheaper mortgage deals saw home-loan approvals rise nearly 6 per cent to 52,410. Economists at Global Insight noted that levels were "still muted and there seems little compelling evidence of a significant step up in housing market activity".