House prices see 'spring bounce' (UK)

The building society said prices rose by 1.1% in March, pushing the annual rate of inflation back up to 5.3%. The average property now costs £162,000.

In the three months to March, prices were 2.2% higher than in the previous three months, which was the fastest spurt since September 2004.

However, the Nationwide played down the prospects of a renewed boom in prices.

"The pick up in prices in March continues the upward trend we have seen since the autumn, which has been supported by a solid return of buyers" said chief economist Fionnuala Earley.

But she pointed to other factors that might keep prices in check.

"Utility and council tax bills are rising and on top of this, affordability continues to be squeezed as house prices rises further" she said.

Gathering pace

The Nationwide's survey puts it in line with other recent survey evidence from its lending rival the Halifax and the Office of the Deputy Prime Minister (ODPM).

The Halifax reported earlier this month that prices were rising at an annual rate of 5.5%.

The ODPM put the annual rate of property inflation to January at 4.3%.

The common theme among many of the housing market surveys and reports is that the market in London, the traditional driver of activity, have been picking up sharply in recent months.