House prices pick up, according to Nationwide survey

The 0.9 per cent year-on-year rise takes average prices to £165,586

The 0.9 per cent year-on-year rise takes average prices to £165,586 (Getty Images)

House prices recorded their strongest annual increase in more than a year in April, amid further signs that the market is seeing a pick-up, Nationwide reported today.

The 0.9 per cent year-on-year rise took average prices to £165,586, and activity is likely to strengthen further in 2013, the building society's latest study said.

On a month-on-month basis, prices dipped by 0.1 per cent following a flat March.

However, the study pointed to wider evidence that the market is seeing an improvement, particularly the first-time buyer sector, which makes up around two-fifths of loans to home buyers.

Mortgage approvals for house purchase have also been averaging 53,000 a month this year so far, compared with 51,000 a month in 2012.

On a quarterly basis, prices rose by 0.5 per cent in April, continuing a trend of increases which started last October.

Quarterly figures are often seen as giving a better indication of underlying house price trends as they smooth out monthly volatility.

Mortgage availability has increased sharply since the Government launched a scheme called Funding for Lending last August, which gives lenders access to cheap finance to help borrowers.

Another scheme called Help to Buy, which will give more people a helping hand to buy a home with a deposit as low as 5 per cent, is also in the pipeline.

Robert Gardner, Nationwide's chief economist, said: "There is some evidence that activity and prices have gained some momentum in recent months.

"The number of mortgage approvals has edged up from the levels prevailing last year and there are reasons for optimism that activity levels will continue to strengthen in the months ahead."

Property analyst Hometrack reported earlier this week that market conditions in London have improved to levels not seen since 2007.

Hometrack also found evidence that the market is improving across the country, with homes taking a week less to sell on average than they did at the start of the year.

PA