Double-digit house price inflation has returned with a vengeance as asking prices hit a new high, according to figures published today.

Data from Rightmove, the property website, shows that the strength of the housing market has defied the predictions of almost all economists this year.

First-time buyers will have to wait even longer to get on the housing ladder. Rightmove’s figures showed that prices increased by 11.5 per cent over the past 12 months and are up by 2 per cent in the past month alone.

Last week the Royal Institution of Chartered Surveyors reported that gazumping was taking place in London once again, as City workers cashed in on the prospect of fat bonuses this Christmas. They said that prices were rising even faster than at the peak of the previous boom in 2003.

Rightmove, which records a wide range of asking prices on its website, said that the average price now being asked for a property was £218,954, surpassing the previous record of £217,580 set in July.

The housing market has consistently done better than expected in recent years. Price rises slowed last year but enjoyed a much softer landing than anticipated. Then, at the start of this year, a mini-boom was observed in the market.

Today’s figures are the latest sign that this mini-boom may in fact be much stronger than had been believed, although the rise in interest rates in August and the strong possibility of another quarter-point increase next month, to 5 per cent, could yet slow inflation in the market. Few in the City, however, are arguing that prices are set to crash.

Miles Shipside, commercial director of Rightmove, said: “There is no respite for potential first-time buyers. Renting for longer, buying your first home later, possibly via shared equity or an interest-only mortgage, is the reality.”

Prices have been driven higher by the strength of the market in the South and underpinned by resilience in the North, he said.

“We have never had a sustained low-inflation, low-interest-rate economy combined with widespread home ownership. These unique conditions help to push prices higher and higher.”

The result is record prices but on a low turnover, as fewer homeowners can afford to trade up, which “is sustainable unless there is a serious economic downturn”, he said.

“The stable economic environment, fostered by low interest rates and low inflation, renders this unlikely.”

The 2 per cent rise in asking prices in the four weeks to October 7 was the sharpest increase since July.

Lower levels of newly marketed properties meant that estate agents’ stocks were selling more quickly, the survey showed. The average time that a property spent on the market fell from 79 days to 77 days in the past month.

Mr Shipside called on Gordon Brown, the Chancellor, to reform stamp duty in his Budget to help first-time buyers.

For more on the housing market visit www.timesonline.co.uk/mortgage

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