Leap in house prices lifts hopes of property revival

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The Independent Online

House prices posted their biggest price increase for five months in April, boosting hopes that the housing market has passed the worst, Nationwide said yesterday.

House prices posted their biggest price increase for five months in April, boosting hopes that the housing market has passed the worst, Nationwide said yesterday.

The price of the average home rose 0.9 per cent, or £2,250, last month to £156,128, although the annual rate of house price inflation fell from 7.9 to 7.0 per cent, its weakest since April 2001.

Fionnuala Earley, the building society's economist, said: "The figures seem to confirm our view that housing market activity, which slowed through the second half of last year, has bottomed out. Confidence will be a big factor in how the market moves forward from here. This is driven predominantly by the macroeconomic background and, in particular, news about interest rates and employment."

Nationwide said another quarter-point rise in interest rates, currently at 4.75 per cent, looked less likely but such a move would not likely jeopardise the gradual cooling in house prices.

The figures come a day after the UK's major banks said the volume and number of mortgage approvals had risen in March.

Separate figures on Wednesday indicated a 35 per cent surge in the number of repossession orders sought by lenders, raising fears that homeowners were struggling to meet their payments.

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