Land Registry figures have revealed that house price inflation has dropped to its slowest pace in nine years. The figures show that prices rose by 0.8% in the second quarter, taking the annual rate of inflation down to 5.4%, the lowest level since September 1996. In real terms they have been static since the start of the year. ODPM figures say that the inflation rate dropped from 6% in May 2005 to 5% in June 2005 leaving the average house price at £184,152. But the figures did give some grounds for optimism. The 0.8% rise in the second quarter came after a 0.3% rise in the first and a drop of 2.7% in the fourth quarter of 2004. Propertyfinder.com also hinted that the market could be improving. It found that 55% of people looking to buy a house expect prices to rise in the next year. Jim Buckle, md of the website, said: “With interest rates now firmly on a downward path, there is no reason to fear a crash and people can feel confidence to move again.”