House prices £15,000 up on 2009

Property prices have risen 0.5% in May, producing annual growth of nearly 10%, according to the Nationwide House price index.

The rate of price growth is still slowing from 1.1 % in April, but the average house price is £169,162, which is a rise of £15,000 year-on-year.

Martin Gahbauer, Nationwide's chief economist, said: "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'. A natural question which therefore arises is whether cash buyers have helped to boost the market and bid up prices?"

Howard Archer, chief UK and European economist at IRS Global Insight, said: "Nationwide reported that house prices rose at a reduced rate of 0.5% month·on-month in May. This was essentially half the 1.1% gain seen in April and the 1.0% rise in March.

"The reduced house price rise ill May reported by Nationwide - following on from the Bank of England reporting that mortgage approvals remained muted at 49,871 in April - fuels our doubts that house prices will be able to make significant further gains over the coming months."

David Smitll, senior partner at UK property consultancy Carter Jonas, said that these were ideal market conditions for anyone looking to sell, but there are question marks over how long they will last.

"The Bank of England is under increasing pressure to raise the Base Rate dlle to rising inflation. Only last week, the OECD stepped into the debate, saying rates must rise by the end of the year.

"Although many economists have set their faces against this call from the OECD, there is increasingly a feeling among the public that the interest rate reprieve is coming to an end," he said.

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