Although house prices in the UK rose in March for the 15th consecutive month, taking the average value of a home in the UK to the highest since January 2008, the rise was only 0.4 per cent, compared with a 0.7 per cent rise in February.
According to the UK’s second largest mortgage lender, said that the average value of a home in the UK is now £180,264, although average values of property in London are more than double the rest of the country, at £362,699.
However, on an annual basis, house price inflation is still rising and was 9.5 per cent in March, up from 9.4 per cent the month before, leading to fears of a nascent housing bubble.
Despite all of this, a spokesperson for the mortgage lender said that the property market is showing some “tentative signs of moderation”, particularly since February saw a sharp fall in the number of mortgage approvals following an unusually active January.
One reason for the sharp hike in prices, particularly in London and the South East, is the lack of available property, with the number of new homes being built in England still around 40 per cent below pre-crisis levels.
Rising house prices across the UK, driven by the improving economy and Government measures to make mortgages more easily available to buyers with small deposits, have led to calls for the Bank of England to take action to stop the market overheating.
However, one of its key powers is putting restrictions on mortgage lending, and it could struggle to limit price growth, as it is believe that some 40 per cent of purchases are made in cash, particularly in the capital.