House prices make their biggest leap for 10 years

Average property now costs £233,252 amid growing confidence in the market

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The Independent Online

Renewed confidence in the housing market has prompted the biggest monthly increase in the asking price for a decade.

New sellers in February helped increase average asking prices by 4.1 per cent, the highest monthly jump since April 2002. The average property asking price climbed to £233,252 in the month from £224,060 in January, according to the latest Rightmove House Price Index.

The growing optimism in the housing market last month was echoed by improving sentiment over housing finances. The latest figures from the benchmark Markit Household Finance Survey, out today, reveal the slowest deterioration in finances since December 2010, as the index reading climbed to 38.7 in February.

Although any reading below 50 indicates a deterioration, Markit concluded that it demonstrated "lower inflation perceptions and a corresponding weakening of the squeeze on the household spending power {that is} lifting the gloom at the start of 2012".

Miles Shipside, director of Rightmove, also sees growing evidence of increasing confidence, in the housing market, although February's asking price hike was driven by the wealthier end of the spectrum. "After four years of constant economic uncertainty, it seems some property consumers have accepted current market conditions as the new norm," he said. "We're seeing a strong 'spring bounce' in asking prices this year, but the ball is still a lot smaller than it was before the credit crunch as market volumes are constrained.

"There is pricing power if you are selling the right type of property in the right place where enough potential buyers have access to funding."

The survey follows upbeat news from estate agents last week that showed the number of house sales edged up in February as first-time buyers rushed to beat the end of the Stamp Duty holiday in March.

However the research from the Royal Institution of Chartered Surveyors showed estate agents reporting that house prices continued to drop across the country,

The Council of Mortgage Lenders last week said its members advanced 18,700 loans worth £2.3billion to potential new homeowners in December. That was 10 per cent higher than the previous month, again because of new buyers rushing to beat the scrapping of the Stamp Duty concession.

Despite the widespread property slump since the heights of the market in 2007, two areas in the country have actually experienced house price inflation in the past five years, according to a recent Halifax survey.

Homes in Rochford in Essex have actually climbed an average 1 per cent in value since 2007 while in South Lakeland in the Lake District, prices are slightly up, by 0.1 per cent.