New figures show that British house prices jumped at their sharpest pace in five months in January, taking the annual rate of increase to a two-year high.
Mortgage lender Nationwide said that house prices rose by 1.2% this month, more than twice the 0.5% gain in December and the biggest rise since August. Analysts had forecast a 0.3% rise on the month.
That took annual house price inflation to 8.6% from 5.9% last month, the highest level since October 2007 following double-digit declines in many months last year.
'Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007,' said Martin Gahbauer, Nationwide's chief economist.
The British economy only just came out of its worst recession since at least the Second World War in the final three months of 2009, with output increasing by a meagre 0.1%.
But buoyed by record low official interest rates and a lack of homes coming on to the market, the country's housing market has recovered quite quickly from the sharp falls in prices seen over 2008 and 2009.
