UK home prices rise most in three years
Funding for Lending Scheme improves credit conditions and leads to increased optimism
UK house prices rose the most in three years this month, led by a surge in London, as demand outstripped supply.
Average values in England and Wales increased 0.3 per cent, the biggest advance since March 2010, property researcher Hometrack said. In London, prices jumped 0.7 per cent, the most since February 2010.
The Bank of England's Funding for Lending Scheme (FLS) has helped ease credit conditions, while plans announced by the government last week to assist homebuyers will also support the market, Hometrack said.
It also said the weaker pound and turmoil in the euro area would continue to lure purchasers from abroad.
"Lower mortgage rates as a result of the FLS have supported increased activity," said Richard Donnell, director of research at Hometrack. "The weakening pound and concerns over Cyprus and the euro zone will only serve to further boost the flow of international funds into the capital."
The pound has fallen 5 per cent against the euro since the end of last year and is the second worst performer after the yen this year, based on Bloomberg Correlation-Weighted Indices.
Rightmove said London home sellers raised asking prices by 1.9 per cent this month as the weakness of sterling fuelled interest from overseas buyers.