Figures showing that house prices had risen by almost £10,000 in a year revealing that house prices are 4.6% higher than a year ago – and are rising at their highest rate for three years, according to the Halifax. Months of steady rises mean the national average property price stands at £169,624, which represents a sharp rise on the £160,428 of a year ago. However, the findings confirm recent studies from Nationwide building society and estate agents which suggested that London and the South are driving the market. Martin Ellis, Halifax’s housing economist, said: ‘House prices are expected to continue to rise gradually through this year, with only modest economic growth and still falling real earnings constraining housing demand and activity.’ Property economist Matthew Pointon, of Capital Economics, argued that house prices are overvalued. ‘Evidence that house prices are in the midst of a steady recovery continues to accumulate, which is bad news for first-time buyers,’ he said. ‘That said, it is unlikely that house prices will continue to show such strong gains. Poor fundamentals will help keep a lid on demand, as will the fact that the market is still overvalued.

‘There are also some signs that the supply of housing is now picking up, which should take some of the heat out of price gains.’ A report from property website Rightmove earlier this week found that six in ten people who rent their home feel ‘trapped’ because they cannot afford to buy.