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![image: [ Estate agents are reporting increases in buyers and prices ]](/olmedia/60000/images/_60541_WINDOW.JPG)
The average price of a house is now £62,770, 12.9% higher than a year ago, the Nationwide said in its monthly house price index.
Prices on a seasonally-adjusted basis rose 0.7% from January, pushing average prices up almost exactly to the peak last seen in the third quarter of 1989.
However, the Nationwide stressed that in real terms, after allowing for general inflation, prices were still some 28% lower than their 1980s peak.
Nationwide's head of research Dr Paul Sanderson said: "A more moderate rise in prices was expected in February following last month's particularly strong figure.
"However, after an apparent slackening in buyer demand since the summer, recent evidence has pointed to a more positive trend in market activity."
Viewings of both new and older properties has increased significantly since Christmas.
Dr Sanderson stressed that a number of competitive fixed-interest mortgage deals on offer was likely to sustain the housing market recovery.
"Such deals are likely to remain attractive given the general decline in longer-term interest rates."
However, he warned that the outlook was heavily dependent on the wider economy, particularly on the severity of the expected slowdown this year.
"This should not prevent a modest increase in market turnover on last year's level, while an improvement in supply should help to slow house price inflation."
The strength of the housing market in 1997 was revealed earlier this week in figures from the Land Registry which showed prices in the autumn 9% up on the previous year .
Its latest survey for the quarter showed average house value in England and Wales was £79,242, up from £72,144 in the corresponding quarter the previous year.
Houses 'sell at fastest rate for three years'
(20 Feb 98 | Business)
House prices nearly back to 80s peak
(03 Feb 98 | Business)
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