Date Published 08 March 2013

The average house price in England & Wales is now only 1% off its previous peak in February 2008

Sales soar 15% in February as mortgage availability rises and bank funding conditions improve

Richard Sexton, director of e.surv comments:

'February's figures paint a much warmer picture for the housing market. Values have climbed £8,154 in the past twelve months and the 0.6% monthly increase in February is one of the biggest monthly increases seen in the past fifteen months.

The housing market is beginning to change gears and pick up some momentum. February sales leapt up by 15%: that's five times the usual seasonal rise thanks to improved mortgage availability and cheaper funding. The Funding for Lending scheme is allowing lenders to reduce mortgage rates and this has led to a mini-revival in the first time buyer market. High LTV lending is forming a bigger overall share of lending and credit scoring is easing.

On a regional level, disparities are growing and London remains in a different league to the rest of the country. On the opposite side of the spectrum Wales experienced the largest fall in annual house prices of -0.6%. And there is a word of warning. Despite gradually improving mortgage availability, cash buyers are accounting for around a third of all house sales illustrating the market is still depending on them to help sustain activity, with high value property in London seen as shielded against the difficult economic conditions in Europe.

And despite the improvements in the mortgage market, funding conditions are still tight for lenders and they are under extreme pressure to increase the mortgage funding on offer. It is also unclear what impact the weak sterling may have on the economy over the next few months.

There are hopes the government will announce a new mortgage indemnity scheme to encourage higher loan to value lending in this month's budget. If funding conditions remain favourable for banks and if rates remain low, there is good reason to believe the housing market will kick on and see a strong spring growth spurt'.