House prices up almost 2% in a month

Homeowners enjoyed another surge in the value of their properties last month as house prices jumped by a further 1.8 per cent, according to the latest figures from the Halifax.

Britain's biggest mortgage lender said the April rise meant house prices had now increased by 19.1 per cent since a year ago, taking the value of the average British home up to £154,304.

The figures will further fuel concerns about a possible boom-and-bust scenario for Britain's soaraway property market. An increasing number of doom-mongers have predicted that the market cannot continue rising at its current levels.

Meanwhile, the rising market further increases the pressure on first-time buyers, many of whom cannot afford to get on the property ladder.

The lack of new buyers coming into the market is expected, in the long term, to stop prices rising at such a rate because househunters who are looking to trade up from their starter homes will eventually have to drop asking prices in order to find buyers.

In an attempt to keep a lid on the property market, the Bank of England is widely expected to increase interest rates by a quarter percentage point tomorrow to 4.25 per cent.

Last night, US rates were kept on hold at one per cent but the Federal Reserve central bank warned that it was likely to start raising rates gradually soon.

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