House prices jump 10% in March, growth expected to 'remain robust'

Year-on-year house price growth has hit the 10% mark for the first time since 2014, according to an index.

UK property values increased by 10.1% annually in March - marking the first time since July 2014 that year-on-year house price growth has been in double digits, according to figures from Halifax. The annual rate of growth had stood at 9.7% in February.

The average house price was £214,811 in March, after jumping by 2.6% month-on-month. It was the biggest monthly increase since August 2015.

Estate agents recently reported seeing a bottleneck of buy-to-let investors stampeding to snap up properties ahead of a stamp duty hike for this sector, which came into force on April 1.

Experts have said these investors brought forward plans for purchases which may otherwise have taken place later this year - meaning the housing market could quieten down slightly in the coming months.

But Martin Ellis, Halifax housing economist, said he expects price growth to remain "robust".

He said: "Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months.

"Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months.

"This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust."

Halifax said recent research has shown that prices for flats have risen more sharply than other property types since 2008. A large proportion of the increase has been due to the London market, which has a high concentration of flats.

Half of property sales in London are flats, compared with the UK average of 17%.

Recent figures from HM Revenue and Customs (HMRC) showed that home sales are rising, while figures from the Royal Institution of Chartered Surveyors (Rics) show the supply of homes on the market remains low.

Howard Archer, chief UK and European economist for IHS Global Insight, said: "Taking an overview of the various studies, we expect house prices to rise by around 6% over 2016 amid reasonably healthy buyer interest, likely fuelled by markedly increased expectations that interest rates will not be rising in 2016, and a relative shortage of properties."