The latest UK house price index statistics produced by the Department for Communities and Local Government also reveals seasonally adjusted house prices decreased over the month (-0.7 per cent) compared with the -0.5 per cent monthly increase observed in September 2010.
The seasonally adjusted index was 6.2 per cent below the recent peak of April 2008 and 9.1 per cent above the recent trough of April 2009.
Country
During the year to September average house prices decreased in England (-1.1 per cent), Wales (-3.4 per cent), Scotland (-3.3 per cent) and Northern Ireland (-11.6 per cent).
Region
Average house prices decreased in eight of the nine English regions over the year to September 2011. The largest decrease was in the North East (-5.2 per cent) while the smallest was in the South East (-0.8 per cent). London registered an annual house price increase of 2.8 per cent.
Over the month to September there were average price rises in three regions, ranging from 0.1 per cent in the South West to 0.6 per cent in the South East.
There was an average monthly price fall in the six othe regions ranging from -0.2 per cent London to -2.5 per cent in Yorkshire and the Humber.
Countries and Regions
Average mix-adjusted house prices in September stood at £215,311 in England, £147,869 in Wales, £160,459 in Scotland and £140,726 in Northern Ireland.
London remains the English region with the highest average house price (£346,618) whilst the North East has the lowest average price at £130,835.
In England, southern regions including the East of England, London, the South East and South West all had average prices above the UK average in September.
Excluding London and the South East, the average UK price in September was £169,870, a decrease of 3.0 per cent over the year.
Type of Buyer
The average price for properties bought by first time buyers decreased by 0.7 per cent to £153,521 over the year to September 2011, compared to an annual decrease of 1.8 per cent in August.
During September prices paid by first time buyers increased by 0.5 per cent on average, compared to a 0.6 per cent monthly decrease in September last year.
The average price of properties bought by former owner occupiers decreased by 1.7 per cent to £240,496 over the year to September 2011, compared to an annual decrease of 1.1 per cent in August.
During September prices paid by former owner occupiers decreased by 1.0 per cent on average, compared to a 0.4 per cent decrease in September last year.
New and pre-owned dwellings
The average price for pre-owned dwellings decreased by 2.1 per cent to £207,818 over the year to September, compared to an annual decrease of 2.0 per cent in August.
During September 2011 prices paid for pre-owned dwellings decreased by 0.7 per cent on average, compared to a 0.6 monthly decrease during the same period last year.
The average price paid for new properties increased by 8.8 per cent to £201,101 over the year to September, compared to an annual increase of 9.2 per cent in August.
During September 2011 prices paid for new properties increased by 1.2 per cent on average, compared to a monthly increase of 1.6 per cent in September last year.
Month on month price changes in new build properties tend to be more volatile, reflecting low transaction levels.
Matt Hutchinson, director, flat and house share website Spareroom.co.uk, comments:
"It is a frustrating time for many prospective buyers, because they are having the carrot of some very attractive mortgage rates dangled in front of them, but because they aren't able to afford the sizeable deposits still demanded by lenders, home ownership continues to remain just out of reach.
"If you add into the mix that demand for rented properties at the moment is driving rental costs higher and higher, forcing first time buyers to dip into their deposit funds to pay rising living costs, then taking that first leap onto the property ladder seems a distant and forlorn dream."
