The property market shows little sign of cooling, with annual house price growth increasing to 10.4% in England and Wales, according to the latest e.surv data.

This means the average house price now stands at £372,436 — a 1% monthly increase.

Wales has enjoyed the highest rate of annual growth, with prices rising by 10.9% over the past year. This is the ninth month running that Wales has held this top spot, thanks to the continued demand for rural living and a ‘race for space’.

However this  latest house price index shows that the London market is also picking up, with e.surv’s monthly data showing prices have risen fastest in Greater London over the past month. In total prices in this region have now risen 9.9% over the past year.

Greater London is now second, when it comes to annual house price growth. This is followed by the South East, where property prices have risen by 9.2%, and the South West (9.1%) and then the East of England (6.9%). Yorkshire and Humber has seen the slowest rate of growth, with prices rising by 4.6%. However this is a significant increase on the 1.1% annual growth seen three months ago.

E.surv director Richard Sexton says: “This month’s data tells the story of the post pandemic race for space over the last year and the more recent demand for properties that fulfil the demands of hybrid working.

“If we look first at the annual trend, we see Wales remains the area with the highest annual growth rate. Lifestyle choices and the requirement for more spacious properties that deliver good working-from home conditions are encouraging buyers to reassess their opportunities.

“However, if we examine the monthly performance, Greater London emerges as the area with the largest increase in its growth rate, up from 5.5% last month, to 9.9% this month. We mentioned in our last index that this change was underway, arguably the result of a renewed need for properties that were well connected to London.”

He adds that this relentless increase in house prices means that this has set another new record for the average property price. Sexton says: “It may be tempting to assume that higher interest rates will impact homebuyers’ aspirations, but rates remain comparatively low and property remains a keen investment too as inflation puts pressure on equities and other asset classes.”

He says supply issues will continue to support growth in the housing market and may confound predictions of a slowing growth rate, in the face of the increase cost of living pressures on consumers. The e.surv report says although there has been some increase in the supply of homes for sale, strong buyer demand continues.

Sexton says that although little firm evidence has emerged at this stage, what is likely is that the market has become more selective, with those in stronger credit positions – in occupations with continued wage growth, savings and in many cases a property to sell – having sustained the market.

He says this continued price growth is also indicative of the scale of the pent-up demand that has built over the last two years or more and which will take time to erode.

E.surv says that the pressures on first time buyers remain particularly acute, as well as their reliance upon parental contributions. Given this it says that it is not surprising that rumours of a revived ‘Right to Buy’ have emerged to help promote the government’s stated aims to extend home ownership.

E.surv says that with the planned closure of ‘Help to Buy’ and ongoing financial pressures any government intervention would help support the market.