House Prices Spring Forward 12% Article Published: 06:48 12/04/2007 Article Classification: Olive Tree Head Office
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UK house price growth shot forwards in March as the seasonal spring boost in activity got underway, according to Rightmove.

Its latest house price index shows that the average UK asking price accelerated to 12.2 per cent on figures 12 months previously, while the monthly change rose from 0.9 per cent in February to 1.5 per cent in March.

The average asking price in the UK is now £228,183, Rightmove claimed, before warning that the true state of Britain's property market is currently uncertain because of several confusing factors.

An artificial supply surge is expected prior to June 1st, the implementation date for the government's home information packs (Hips) which have proved unpopular within the property industry.

Also affecting the residential housing market will be the Bank of England's decision on interest rates; with three recent hikes already filtering through to the market and a fourth on the cards this could deter buyers.

Despite all these complications, Rightmove commercial director Miles Shipside argued that market fundamentals would ultimately prove decisive.

"As we have seen recently, raising interest rates can be used to influence the direction of prices in the short term but do very little to address the underlying cause of house price inflation. Crucially they cannot address the increasing demand for housing driven by the needs of a growing population," he said.

Mr Shipside's prediction has been mirrored by Warren Bright of property website propertyfinder.com, which showed that although homebuyers' confidence has improved, "interest rates and affordability issues are still at the forefront of people's minds".

"We think the Bank of England has done enough to ensure that the market cools sensibly - a further rise next month may prove a step too far," Mr Bright added.