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House prices add 6,000 in month

Monday April 19th 2010

House prices jumped 2.6% over the last month as buyer interest increased in line with an expected spring surge.

Property website Rightmove said the average price of a UK property rose to £235,512 between March 7 and April 10.

The increase of about £6,000 on the value of an average home was considerably more than a 0.1% hike the previous month which lifted house prices by just £230.

The Government's new stamp duty tax break for first-time buyers - introduced last month for all properties under £250,000 - also buoyed activity in the sector.

Rightmove identified a 35% hike in the number of property pages viewed over Easter. The number of new properties coming on to the market also rose sharply, with buyers enjoying the greatest choice since October last year following months of a shortage in supply.

The news comes after last week's survey data from the Royal Institution of Chartered Surveyors (RICS) showed that selling activity soared to its highest level since May 2007 in March.

But Rightmove warned that the potential for over supply could see prices come under pressure later in the year. Falling house prices as a result of over supply can lead to problems with negative equity for new home buyers, when they owe more than the house is worth.

This could cause problems if people are caught out by an expected rise in interest rates, and can no longer afford to meet their mortgage payments. If this occurs, and the homeowners are unable to sell their house, they could face repossession and also be saddled with a bill for the mortgage debt still outstanding. One way to protect against this is by taking out mortgage payment protection.

Copyright © Press Association 2010.

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