RECENT UK house price figures released by the Nationwide, Halifax and the Land Registry prove that house prices continue to escalate, albeit by varying rates.

While on the surface, this gives cause for concern over the sustainability of a marketplace continuing to show such significant price increases, in reality, no-one is predicting a slump in prices, says Knight Frank.

The latest figures from the Nationwide showed a monthly increase of 3.4 per cent in UK property values during the month of April. Taking their average house price of just over £100,000, values increased by an average of £110.13p per day in April.

Meanwhile, the Halifax reported a more modest increase in values of 0.7 per cent for April.

While these figures are poles apart, relatively speaking, the all-important underlying sentiment from both lenders is identical, a view that is reinforced by the international property consultants, Knight Frank.

The major driver of house price growth over recent years has been the constant supply/demand imbalance, forcing potential purchasers to compete for good quality property in sought-after locations.

Global economic fluctuations during the second half of 2001 dampened an over-enthusiastic marketplace and bought with it the gradual realisation in vendors’ minds that the property market and prices were slowing down.

However, in 2002, Knight Frank witnessed a flight of money from the poor performing stock market into bricks and mortar, which are now viewed by an increasing number as a realistic and attractive investment alternative.

Additionally, property investors now largely appreciate the relative low risk of residential property when held over a longer term.

David Moulton, residential research manager at Knight Frank said: “The continued growth of buy-to-let, coupled with the emergence of numerous large-scale residential investment funds has created further upward pressure on property prices as once again, demand exceeds supply.”