House prices break £180,000 barrier

Nationwide Building Society said prices increased by 0.9% during the month, up from 0.5% in March.

Year-on-year change was recorded at 10.2%, representing a return to double-digit growth following a dip the previous month.

Average house prices now stand at £180,314 - a rise of more than £3,000 on the previous month and £16,741 on the same period last year.

The lender said news of rising house price inflation is likely to seal a hike in interest rates in May.

Fionnuala Earley, chief economist at Nationwide, said: "The Bank of England held off raising rates at the beginning of April, but the acceleration in house prices during the month makes a rate rise on the Monetary Policy Committee's 10th anniversary look like a certainty."

But despite strong growth, the trend still shows a gradual cooling in the market, according to Nationwide.

Ms Earley said: "While the monthly rise in prices is stronger than the MPC would have liked to see, it can take some comfort from the fact that the underlying trend is softening and the return to double-digit annual growth largely reflects a weak period this time last year.

"The three-monthly growth rate, which smoothes the volatility of the monthly series, is still cooling in response to the earlier rises in interest rates. The latest figures show prices increased by 2% between February and April, the lowest three-monthly growth rate since last August."

Nationwide said talk of interest rates climbing to 6% and beyond were overblown and warned that with the market already showing signs of cooling, too sharp a rate hike could undermine market confidence and lead to widespread payment difficulties and price falls.