HOMEOWNERS were given further evidence last week that the housing market has turned and property prices are rising.

House prices jumped 1.4% in January, according to Nationwide building society, the strongest monthly rate of growth since July 2004. This has taken the average house price from £157,250 to £158,478.

Nationwide’s data were supported by Bank of England figures showing that the number of new mortgage approvals rose for the fourth consecutive month in December to 122,000. This is not far off the peak of 132,000 approvals reached in the heady days of December 2003, said Simon Rubinsohn of Gerrard, a stockbroker.

This is good news for people who are thinking of putting their property on the market during the spring house-hunting season.

Paul Smith at Haart estate agents said: “The housing market ended 2005 on a high with sale transactions in London increasing by a staggering 100% from the previous year. This increased activity has carried over to the new year and the housing market has made a very strong start with prices increasing by a steady 2% as the number of buyers has risen by more than 10%.

“They have a lot more confidence in the market and as a result we are seeing properties at the right price being snapped up in days, even hours. We are also seeing first-time buyers come back with a vengeance.”

Liam Bailey at Knight Frank, another estate agent, said that the market in the capital had picked up strongly since September last year, and for the first time in three years prices in London were rising beyond the national average. Property values at the top end, known as the prime market, rose by 8.2% last year, according to Knight Frank, compared with a 3% increase nationally.

Bailey expects London to continue to outperform this year. He is expecting values to increase by 5% overall in the capital, with prime properties rising by 7.2%.

City bonuses and increasing optimism have helped to boost the London market.

Peter Rollings at Marsh & Parsons, another estate agent, said: “If I wanted to sell, I would sell now because there is a real shortage of stock. In one of our agencies last weekend we had 12 new appointments, nine of which were City bonus buyers. And we have had cases of properties going for more than the asking price. The market is the most exciting it has been for quite a while.”

However, this is not the case everywhere. Rightmove, a property website, reported a 0.1% increase in property prices last month but, if price rises in London and the southeast were stripped out, the figure would have been negative. It reported falls of 1.9% in the northwest, 2.3% in the West Midlands, 3.4% in East Anglia and 4.1% in the southwest.

Miles Shipside at Rightmove said: “The geographic split was quite marked last month as sellers in many parts of the country continued to readjust. London and the southeast have had a couple of tough years acclimatising themselves and are coming out the other side.”

Sellers elsewhere across the country may therefore need to lower their asking prices if they want to get a buyer, warned Andrew Bottomley, regional manager for the northwest and Northern Ireland at Halifax estate agents.