Record property prices in May

In England and Wales asking prices for property rose to a record high in May, despite expectations for a much weaker housing market this year . A survey shows, with house price inflation accelerating.

Property Web site Rightmove said average asking prices rose 2.2 percent on a year ago between April 13 and May 10 to hit an average 242,500 pounds, compared with a 1.3 percent annual rise in the month before.

Prices increased 1.2 percent on the month. The figures are not adjusted to take seasonal factors into account but suggest there is may still be some momentum left in the market as it trends lower.

Economists are predicting falls in house prices of about 10 percent this year and Bank of England policymaker David Blanchflower has warned prices could dive by about a third unless aggressive, immediate action is taken.

However, interest rates are unlikely to come down fast given worries over inflation and, after a decade in which house prices nearly trebled, BoE Governor Mervyn King has indicated a moderation in prices is probably needed.