House price rises continue apace

Britain's housing boom continued apace in April according to the Halifax, the UK's biggest mortgage lender.

The bank's latest survey showed prices jumped by 1.8% in April, slightly down on the 2.2% rise in March, with prices up 19.1% on last year.

The rise means that the average property now costs more than £154,000.

Low interest rates and high employment levels have continued to drive prices higher, with many expecting the Bank of England to raise rates on Thursday.

Rate rise

The Halifax findings are roughly in line with those of other lenders.

The market remains underpinned by sound fundamental factors with high levels of employment, low interest rates and low levels of debt servicing costs driving high housing demand Martin Ellis, Halifax City bets on rate hike

Last month, Nationwide, the UK's largest building society, said UK house prices increased by 2.1%.

At the same time, Nationwide raised its 2004 house growth price forecast to 15% from 9%.

The Halifax figures may strengthen the case of those calling on the Bank of England's Monetary Policy Committee (MPC) to raise interest rates to cool consumer debt and the housing market.

House prices rise continues unabated

The MPC meets on Wednesday and its decision on interest rates will be announced on Thursday.

The committee is widely expected to raise the bank's base rate, probably by a quarter of a percentage point.

Martin Ellis, chief economist at the Halifax, played down fears that the housing market could be overheating and said he expected interest rates to rise to 4.5% by the end of 2004.

"The market remains underpinned by sound fundamental factors with high levels of employment, low interest rates and low levels of debt servicing costs driving high housing demand. These factors are combining with supply shortages to push up prices," Mr Ellis said.