The average UK home now costs £310,000 following the second highest March increase in a decade, as demand continues to outstrip supply of available homes across the country.
The greatest price increase was seen in the East Midlands, which stretches from Northamptonshire to Derbyshire and includes cities such as Nottingham, Leicester and Lincoln, according to the latest Rightmove House Price Index.
Homes in the region are now being marketed for a record average of £200,600 – £10,800 more than a year ago.
The West Midlands saw the second highest annual house price increase of 4.2 per cent to £213,000, with prices rising by a similar amount in the East of England, up 3.9 per cent to £340,000.
London experienced modest growth of 0.9 per cent, making it one of the bottom three regions in terms of price rises. However, homes in the capital still cost more than double the national average, standing at £650,000.
Annual price growth across England and Wales is slower than in previous years – rising by an average of 2.3 per cent, compared to 7.6 per cent last year.
This is largely because houses are becoming increasingly unaffordable, according to Rightmove director Miles Shipside.
He says: “While six consecutive years of price rises have been a gravy train for many home-owners, some of them are running into the buffers of affordability when they come to trade up. Meanwhile many would-be first-time buyers are being left waiting on the platform struggling to even get on board.”
“Modest average wage rises and tighter lending criteria have limited buyers’ ability to pay more. Many buyers are being forced to be price-sensitive, so sellers have to be wary of over-pricing if they want to sell.”
The only two regions to see modest annual falls in house prices were Wales, where prices fell 0.6 per cent to £173,000 and the North-east, where the average asking price of £147,000 is 1.1 per cent lower than in March 2016.