The UK housing market continued its Olympian performance last month, with national house price inflation reported at its highest pace since October 2002, report the Royal Institution of Chartered Surveyors (RICS).

45% more surveyors reported a rise in prices in March than a fall, up from 39% in February. The number of enquiries showed little change but an increase in agreed sales means that the number of chartered surveyors with unsold properties on their books has continued to edge downwards.

Strong demand has been supported by improvements in the wider economic climate, with unemployment in January at its lowest for 30 years. Two rate rises by the Bank of England in the last 6 months have done little to dampen appetite for bricks and mortar which is increasingly perceived as the best investment.

Investors will be heartened to see strong activity and steadily rising prices especially in Yorkshire, the North West and in particular Wales, which leads the pack with 71% of chartered surveyors reporting price rises.

The rest of England is also picking up, with prices in the South East rising as demand firms up once more. In London residential property price inflation is at its strongest since June 2002 and the industry is bullish about future sales.

RICS housing spokesman, Ian Perry, said: “The shortage of housing in the UK is continuing to underwrite price growth. Big rises and the lacklustre performance of the stock market in recent years has also led to residential property to be perceived as the golden asset class.”

“The reality ten years from now may be very different given that economic conditions change, as demonstrated in the early 90s. But for the present at least, sustained rises and limited supply spells capital gains for homeowners.”

“This is not good news for first time buyers and those locked out of the housing market by the same price rises that have so benefited others. An interesting question to ask is how any present or future UK government will find the political will to build the number of houses required to halt this trend, especially with the financial interests of so many voters at stake.”