Nationwide: House Price Rise Hits 10.5%

The BBC Online Reports that annual rate of UK house price inflation has hit double figures for the first time since June 2007, according to the Nationwide.

The building society said that house prices in the UK had risen by 10.5% in the year to the end of April.

Prices rose by 1% in April to push the cost of the average home to £167,802.

However, the Nationwide predicted that the past year's surge in prices would tail off later this year, with sellers starting to outnumber buyers.

The building society's figures show that prices in the past three months were just 1.1% higher than in the preceding three months.

Despite the revival in prices, which has taken many commentators by surprise, activity in the property market is still relatively subdued.

This has been due to the enforced rationing of mortgage funds provoked by the credit crunch and the banking crisis that started in 2007.

This means the average first-time buyer still has to put down a 25% deposit to secure a mortage.

The most recent figures from HM Revenue & Customs (HMRC) showed that completed sales in the UK jumped by 22% in March from the month before to 72,000.

However, apart from last year, that was the lowest March figure since the HMRC's current records started in 1978.

"The strong rebound in house prices over the last year has taken place within the context of a subdued mortgage market, with the number of mortgage advances across the industry still well down on pre-crisis 'norms'," Mr Gahbauer said.