Prices and demand rise in February

Prices in the three months to February were 7.9% higher than in the previous year.

Home sales increased for the ninth successive month in January to 103,440, 30% higher than January 2013.

Stephen Noakes, mortgages director, said: "Several factors appear to have boosted demand, such as the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates.

"However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices.”

From December 2013 to February 2014 house prices were 2.1% higher than in the preceding three months of September 2013 to November 2013.

Mortgage approvals for house purchases were 11% higher in the three months to January compared to the previous three months, while they were 42% higher than January last year.

Noakes added: “We are also seeing signs of a revival in housebuilding, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms."

The number of housing starts in England in 2013 stood at 98,610, increasing by 24% compared to the year before.