"The pressure cooker of the London property market has been building up a head of steam every month since the beginning of the year"
-Miles Shipside, director at Rightmove
Britain's home sellers increased asking prices for a fifth month in a row, pushing them to the all-time high in May, providing the property market with its best start to a year since 2004. According to the property-website operator Rightmove data, prices rocketed 2.1% in May to an average 249,841 pounds ($380,000), taking the surge in the first five months of the year to 9.1%. At the same time, prices in the U.K. capital jumped 3.3% to 509,870 pounds, also reaching a record. The report also showed that the government a credit-easing programme and the government's March budget are boosting confidence in the housing market, which has been hampered by the struggling economic growth.
"The pressure cooker of the London property market has been building up a head of steam every month since the beginning of the year," said Miles Shipside, director at Rightmove. "For those with money, many options to borrow remain open in spite of the credit crunch, and this is helping fuel the London price boom."
"Interest rates are low right across the world and that inevitably pushes up asset prices," said Bank of England Governor Mervyn King. In the U.K., house prices have been "remarkably stable for the last few years. That's not a bad position to be in."
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