HOUSE prices rose by an average of more than £100 a day this month as the property market continued to boom.

Nationwide Building Society said UK house prices increased by 2.1 per cent during the month, up from 1.4 per cent in March, taking the average value of a home to £145,918. The surge in prices caused annual house price inflation for the year to the end of April to rise to 18.9 per cent, the highest level since June last year.

The figures will increase pressure on the Bank of England's monetary policy committee to raise interest rates to 4.25 per cent when it meets next week in a bid to cool the market.

Nationwide said it expected growth of 15 per cent in the housing market for this year.

It said 117,000 properties were bought in February, but only 28,000 first-time buyers entered the market.

Despite affordability for first-time buyers becoming stretched, Nationwide said it was not expecting prices to fall.

The society said it expected interest rates to rise to 4.75 per cent by the end of the year, which would mean mortgage payments for the typical buyer would account for 32 per cent of take-home pay, up from 27 per cent currently but still well down on the early 1990s level of 39 per cent.

Meanwhile, experts from a leading think-tank warned last night that a 20 per cent fall in house prices could lower economic growth by as much as 1.25 per cent.

According to the National Institute of Economic and Social Research, if house prices fell by 20 per cent, this would reduce consumer spending growth by up to 2.5 per cent, and lower GDP by as much as 1.25 per cent in the following year.