House prices increase by 1.1 pct in April 2007

LONDON (Reuters) - House prices rose by their smallest monthly amount this year in April, a survey showed on Thursday, but annual housing inflation was still in double digits despite higher borrowing costs.

An industry house price survey showed house prices rose 1.1 percent last month, the weakest this year and following an upwardly revised 1.2 percent gain in March, while the three-month annual rate of house price inflation eased to 10.9 percent from 11.1 percent.

But that was still above analysts' forecasts of a monthly rise of 0.8 percent and annual rate of 10.5 percent.

Thursday's figures followed a survey from rival mortgage lender last week showing house prices rose at their fastest rate since December and analysts said the data indicated the market was still in decent shape.

"The data for April reinforces our expectation that house prices will only gradually lose buoyancy over the coming months," said an industry expert.

The data suggested that the Bank of England's three interest rate rises since last August and the prospect of another increase to 5.5 percent today has done little to cool the property market.

A chief economist noted there were some signs that the housing market would slow in coming months, such as weaker mortgage approvals. He also acknowledged that healthy demand and tight supply was still pushing up prices.

The nation's largest mortgage lender said the cost of an average home stood at 196,745 pounds in April.

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