House prices increase by 1.2%

Marking a "buoyant start" to the property market in the new year, optimistic homeowners increased their asking prices by 1.2% in the first week of January, research shows.

Meanwhile during the five weeks to January 9, the average cost of a home on sale in England and Wales shot up by 0.4% to £222,261, property website Rightmove has found.

The online property search business registered a 26% year-on-year rise in the number of people viewing homes on the website.

It has been estimated that shortage of homes on the market could continue to keep prices high for at least a short term.

The latest hike also led to a 4.1% rise in the average asking price, compared with the month of January in 2009.

Miles Shipside, commercial director of Rightmove, said: "This rise in asking prices is an early indicator that new sellers in 2010 have the confidence to try for a higher price, as the index was lined up for a fall until the turn of the year.

"We were expecting a drop of about 1% as the majority of this month's index falls in December, but the optimism of those early January sellers flipped it around."

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