House prices surge by over 10% in a year

The rise in house prices hits double figures for the first time since crunch

Property prices are rising by over 10% a year for the first time since the housing market peaked in June 2007, according to the latest survey by Nationwide.

A 1% rise in April means that property has got more expensive every month since the Bank of England dropped interest rates to a record 0.5% in March last year.

New statistics show that the average British home is now 10.5% more expensive this month than the year previously, at £167,802.

Now, property prices are exactly 10% lower than they were during the peak, although some homes in parts of central London are already above those recorded in the summer of 2007.

The news has astonished property experts around the country, who believe London will experience the most dramatic recovery because houses for sale are in such short supply.

However, it is unlikely that annual house price inflation will remain in double digit territory over the coming months.

Martin Gahbauer, Nationwide‘s chief economist, said: ‘Given the very strong performance of the house prices from May 2009 onwards, it will take monthly increases in excess of 1% for the annual rate of inflation to be maintained in double digits going forward.’

Other economists also insist that Britain has now reached its ‘high water mark’ for the year.

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