House prices up 10.5% year-on-year

House prices in the UK rose by 1% month-on-month in April, leaving them 10.5% higher than a year earlier, show the latest figures from Nationwide.

The annual rate of price inflation has moved into double digits for first time since June 2007, but are still 10% below the October 2007 peak.

Martin Gahbauer, chief economist at Nationwide, says: “Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have risen by 6.7%. This compares to a 13.5% increase in the consumer price index, the official target measure of inflation.

“April’s figures show the first double-digit annual growth in UK house prices since June 2007. The year-on-year rate in this month’s figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last year.”

He says given the very strong performance of house prices from May 2009 onwards, it will take monthly increases in excess of 1% for the annual rate of inflation to be maintained in double digits going forward.

He adds: “The smoother three month on three month rate of inflation edged down further from 1.5% in March to 1.1% in April, which primarily reflects the impact of February’s 1.0% decline in house prices. April’s figures leave UK house prices exactly 10% below the October 2007 peak.”