The number of new home sales in the UK has increased at the fastest rate since records began, according to the latest Halifax House Price Index.
New data reveals sales jumped from 116,930 in February to 165,480 in March, which is the highest monthly total since April 2005, when the figure began being tracked.
Sales in the first three months of 2016 were 32 per cent higher than in the same period last year, with the monthly and annual increases being attributed to a rush to beat the new stamp duty tax rates introduced in April.
House prices up
At the same time, the average cost of a UK property has increased by almost 10 per cent over the past year, according to the index.
The new data shows that costs in the three months to April were 9.2 per cent higher than in the same period three months a year earlier, as prices continue to rise across the UK.
On a monthly basis, house prices were 1.5 per cent higher in the three months to April than in the previous quarter from November to January, with the average cost of a UK property now standing at £212,321.
Despite the increases, there has been a slight reduction of 0.8 per cent in prices over the past month, which indicates a general slowing of growth as market fluctuations ease.
The latest quarterly Halifax Housing Market Confidence Tracker also shows that optimism about price rises remains high, with a clear majority (65 per cent) believing that average UK property prices will be higher rather than lower in 12 months’ time.
This marks a substantial and continued rise in optimism among UK home buyers, as just 32 per cent of those surveyed when the tracker was launched five years ago displayed optimism in the market.
Commenting on the report, Martin Ellis, Halifax housing economist, noted that both quarterly and annual rates are at their lowest since last autumn, with current market conditions remaining tight due to high demand.
Nationwide House Price Index
Meanwhile, the Nationwide House Price Index showed a 4.9 per cent annual increase to April 2016, with costs edging up 0.2 per cent over the course of the month.
Growth moderated from the 5.7 per cent recorded in March, returning the annual pace to between three per cent and five per cent, which has largely prevailed since the summer of 2015.
The report also observed a surge in the number of residential property transactions in March, including both mortgaged and cash purchases, with the 165,400 transactions consistent with the figure reported by Halifax.
Nationwide chief economist Robert Gardner said the surge in house purchase activity resulting from the increase in stamp duty on second homes from April 1 provided a “temporary boost” to prices.
He added: “However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead.”
It comes as the Council of Mortgage Lenders reported that gross lending activity rose sharply in March, hitting almost £26 billion compared to the £18 billion recorded in February.