UK house prices 'up 50% on 2002'

Have recent rate rises begun to cool the market?

The price of an average home in the UK has risen to £184,582 - a 50% rise from the start of 2002, a survey by property website Rightmove has said.

Prices have risen more than £13,000 since January and are climbing at twice the rate of 2003, the survey said.

It added prices rose 2.8% in March from February, taking annual price inflation to 14.4% from 11.9%.

A National Association of Estate Agents (NAEA) report said prices rose 2% in March for a 12% year-on-year rate.

The NAEA also said London prices rose 1.8% last month - despite recent figures showing a slowdown in the area.

Priced out?

The rise meant prices in the capital were up 7.9% year-on-year.

At the rate we're seeing so far this year, I can easily see house price inflation hitting 20% this year - twice the level we saw last year Miles Shipside, Rightmove

However, the rises could mean that first time buyers were finding it even more difficult to get on the housing ladder - with the percentage of such buyers falling to 16% from 20%.

The two reports are consistent with data from mortgage lender Halifax and building society Nationwide which suggested the market was accelerating again after a brief pause towards the end of 2003.

Righmove director Miles Shipside said: "What differentiates this year from last is that in 2003 London and the South East were very sluggish while the rest of the country generally performed strongly.

"In contrast, in 2004 all parts of the country are firing on all cylinders.

"At the rate we're seeing so far this year, I can easily see house price inflation hitting 20% this year - twice the level we saw last year."

At the same time as surveys suggest continued strength in prices, a growing number of economists not linked to estate agents or mortgage lenders are warning of a possible bubble.

Last week, fund manager Tony Dye - who predicted the dotcom crash - added his name to the list of economists and financial institutions predicting a significant downturn in house prices over the next few years.