Despite the three interest rate rises since August, house prices shot up by 0.7 per cent this month, the sharpest rise since May 2004, reports February's first housing market survey.
Research by Hometrack reveals that annual house price inflation is now running at 6.4 per cent as buyers are still rushing to buy up property in spite of the increased cost of borrowing.
In addition, 14 per cent more properties have been registered with estate agents and the number of house hunters has moved up 23 per cent, implying that this rise could continue for some time to come.
"Despite the January rate rise, it seems that a lack of supply is continuing to support higher prices, primarily in London and the south-east," said Richard Donnell, Hometrack director of research.
Mr Donnell concluded: "In the absence of any external shock to demand and the apparent willingness by purchasers to pay what is necessary to access the market, then house prices look set to increase further over the coming months."
However increases were not uniform across the country; under half of the UK saw price rises this month and two thirds of these were in the south-east.
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