House prices have risen by £100 a day

The value of the average home rose by more than £100 a day last month, according to figures from Halifax bank yesterday that showed little sign of a slowdown in the market.

The value of the average home rose by more than £100 a day last month, according to figures from Halifax bank yesterday that showed little sign of a slowdown in the market.

House prices soared by £3,405, or 2.2 per cent, during May to £157,849, boosted by strong demand and a shortage of properties for sale.

The increase, which triggered speculation of another hike in interest rates as soon as tomorrow, took annual house- price inflation to 20.4 per cent.

This was the first time the annual rate had broken the 20 per cent barrier for a year and shattered hopes at the Bank of England for a gentle slowdown.

The Halifax's findings come after figures showed mortgage borrowing was growing at a record pace. The pace of increase will raise fears the market is headed for a repeat of the house-price crash of the early 1990s. But Halifax said the market would slow as rising interest rates and spiralling prices kept new buyers out of the market.

Martin Ellis, the bank's chief economist, said: "Higher interest rates and the increasing difficulties that face aspiring first-time buyers should exert downward pressure on house price inflation later in the year and into 2005."