There was encouraging news for the housing market yesterday when government and commercial data showed house prices continuing their slow recovery, boosted by increased confidence among buyers.

Information released by the Office of the Deputy Prime Minister (ODPM) and the property website Rightmove showed prices over the autumn continuing the modest upward trend noted by building societies this month. Analysts said further increases risked alienating buyers already stretched by rises in fuel and utility bills and the cost of mortgages.

The house price index published by the ODPM, which lags behind other studies because it is based on a sample of 50,000 completed sales, showed prices increased by 3.3% in September compared with the same time last year, up from a 2.8% rise in August. The increase put the average price of a home in Britain at £186,723, up from £186,208 in August. The north of England showed the largest rises, with the north-west increasing by 7.9%, and Yorkshire and the Humber rising 7.1%. The smallest increases were in the south-west.

The property website Rightmove, which looks at the asking prices of nearly 132,000 homes, said the average price of a home in England and Wales rose by 0.8% during the four weeks to November 12 to £197,855. This is around the level seen seven months ago, which means they have remained almost static since then.

The company said prices had risen 4% year-on-year, up from 1.5% in October.

Milan Khatri, chief economist at RICS, said the figures showed the market was "gradually firming", helped by the recent rate cut. Howard Archer, chief UK economist at Global Insight, said prices would not rise markedly in the coming months.

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