Average home now £152,000

HOUSE prices are continuing to rise, with the average UK house now worth nearly £152,000, new figures reveal.

Average national house prices rose by 0.6% in May according to the monthly survey by property research company Hometrack. Overall, house price inflation has reached 3.2% so far this year.

In London, the increase has seen the average house price pass the £250,000 barrier for the first time. The average cost of a property in Greater London is now £250,300.

Many homeowners will have seen an even greater increase in the value of their property. In Cumbria, average house price inflation rose by 1.5% in May, while in Lancashire prices rose by 1.3%. In the South West, prices in Cornwall rose 1% on average in May.

City hotspots include Carlisle, where the average property soared by 2.2% in May, Croydon, where prices rose by 1.7% , and Preston, where house price inflation also reached 1.7%.

John Wriglesworth, housing economist at Hometrack, said 'There are no signs of a slowdown. With little prospect of interest rates rising significantly this year, and with lenders continuing to aggressively push special mortgage offers, house buyers are still finding the means to afford more and more expensive properties.'

This is backed up by the figures, which show the number of house sales rose by 2.7% in May, while the number of buyers was also up by 2%.

Less encouraging for would-be buyers hoping for a bargain is the news that the discount on asking prices is also diminishing, according to Hometrack. On average the sales price achieved as a percentage of the asking price is 96.4%.

Demand from potential buyers for property is also outstripping the available supply, say Hometrack. This is expected to fuel further house price increases over the next few months.

However, Wriglesworth adds: 'While we predict house prices to rise by 8% this year we are now expecting house price inflation to slow down to 4% in 2005.

'While the current housing boom will come to an end, we see no prospect of a housing market crash.

The only economic factors that could precipitate a housing market crash are a doubling of interest rates, stamp duty or unemployment.

'None of these is expected by UK economists either this year or next.'