House prices in the South-East surged ahead by four per cent during the past month as potential buyers rushed back to the market.

Property web site Rightmove said the increase was the second highest monthly jump recorded since the "boom days" of May 2002.

At the same time, annual house price inflation increased for the third month in a row, rising to 11.9 per cent, up from ten per cent the previous month.

The group put the rise down to a big increase in interest from potential buyers, with twice as many people looking to move house during the four weeks to March 6 as there were in December.

The average cost of a home in England and Wales now stands at £179,570, more than £5,000 higher than a month ago and five per cent above the average price at the beginning of the year.

Miles Shipside, commercial director of Rightmove, said: "Prices are storming ahead on the back of renewed interest from buyers.

"The market now seems to be back in full steam, with prices responding to the scarcity of homes by rising strongly.

"Unless we start to see more properties coming on to the market, with borrowing costs still cheap and confidence sound, the only way for prices is up and double-digit house price growth this year looks more and more certain."

The group said there was strong interest from all groups of buyers, including people looking to buy a property at the top end of the market, investment landlords and first-time buyers.

It added that it expected the buoyant conditions to continue for at least the next few months.

Rightmove said prices had risen in all areas of England during the past four weeks, with Yorkshire and Humberside leading the way with a 5.7 per cent jump, followed by the East Midlands at 5.3 per cent and the South-East at four per cent.

Wales was the only region where prices were down, dropping by 0.7 per cent, although the West Midlands managed growth of just 0.5 per cent.

The London market continued to recover, with prices in the capital rising by two per cent, following the previous month's increase of 4.1 per cent.

This pushed the average cost of a home in London through the £275,000 barrier to £275,459.

Monday March 15, 2004