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Forecasts for 2004 are raised as markets rebound

Rightmove was the most upbeat of the house price indices in March, showing a 2.9 per cent increase compared with 2.1 per cent in February.

It says annual house price inflation rose to 11.9 per cent in March from 10 per cent in February, putting the average asking price at £179,570.

Commercial director Miles Shipside says: “All the indices are seeing the same thing. The market has rebounded with a vengeance this year and for the moment there is no sign of it abating. Those cautious commentators who had predicted 5 per cent house price inflation for the whole of the year have clearly underestimated the strength of the market, since house prices are already up by at least 5 per cent, with estate agents in some areas reporting even bigger increases.”

Halifax&#39s house price index shows a 2.2 per cent increase in March, up from 1.7 per cent in February. It estimates the annual change in house prices at 18.5 per cent compared with 17.8 per cent in February and says the average house price is now £151,476.

Halifax says the gap between average prices in Greater London and the North has narrowed by almost £10,000 over the past year. Chief economist Martin Ellis says: “The ongoing strength of the market has taken the average UK house price through the £150,000 barrier for the first time.”

According to Nationwide, the rise in prices slowed to 1.4 per cent in March from 3.1 per cent in February. However, it has increased its forecast for 2004 to 15 per cent from 9 per cent because of the stronger than expected start to the year.

Its survey shows that the average house cost £142,584 in March. Group economist Alex Bannister says: “We remain confident that price growth will moderate during 2004 in response to higher interest rates. We expect base rates to reach 4.75 per cent by the end of the year.”

Hometrack again showed the smallest monthly increase in house prices at 0.7 per cent, down from 0.9 per cent in February. However, it says ongoing pent-up demand in the market has persuaded it to upgrade its annual forecast to 8 per cent from 4 per cent. Hometrack says the average house cost £149,800 in March.

Housing economist John Wriglesworth says: “Doom-mongering, headline-grabbing economists predicting an imminent housing market crash will soon have to raise their own forecasts or face the consequences of looking incredibly foolish.”


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