The latest National Association of Estate Agents (NAEA) survey reveals that house prices jumped up 2% in March and 12% from last year – the highest rate of annual inflation for over a year.

And with sales prices achieved reaching 97.7% of the asking price, it’s a sellers market, estate agents say. This level of price achieved has not been seen since 2002.

Estate agents getting more bullish too – 93% expect prices to rise further and almost two thirds are reporting higher price rise expectations than at the start of the year.

The number of transactions was stable at around ten per month, the same as the previous month and the previous year. The number of house buyers fell from the previous month, but the supply of properties available dropped even more, ensuring that demand continues to exceed supply.

First time buyers drop again

The percentage of sales to first time buyers dropped slightly to 16% after hitting a recent high of 20% last month. However this is still much higher than for the latter part of 2003. New buyers are not giving up on the market

and are being helped by mortgage lenders offering even higher multiples of income to help them get on the property ladder.

London recovering

House price inflation rates in London show that the capital is catching up again after a lacklustre year. Monthly rates of inflation of 1.83% are broadly in line with national figures (1.99%) however the annual rate of increase is only 7.94% compared to the national figure of 11.84%. However, London has the highest density of first time buyers (22.6%), with large city bonuses and generally higher incomes enabling new London purchasers to afford higher house prices than elsewhere in the country.

Agents turning more bullish

Estate agents across the country are at their most confident ever with 93% believing that house prices will increase further over the year – three quarters believing that this rise will be more than 5%. Almost two thirds of the agents surveyed indicated that their expectation was higher now than at the start of the year. Historically low interest rates are the main reason for this (63%) with higher salary multiples on loans (13%) and more first time buyers (11%) also contributing.

Melfyn Williams, President of the NAEA, said: “This month’s survey shows that prices have continued to rise strongly both annually and monthly.”

“Estate agents across the whole country are becoming much more bullish with respect to house price rises this year. In addition, buyers are having to pay even closer to asking prices to secure the properties they want, another indicator of house price rises to come.”

“Recent reports of an imminent crash in the housing market have as much foundation as a house built on sand. These commentators are totally detached from the reality on the ground, where estate agents are united in predicting another year of strong price rises across the country.”