The headline rate of house price growth continues to accelerate in the UK. Average house prices grew by 0.8% in March and the year-on-year rate growth now stands at 6.7% - the highest since June 2003, according to research by property valuers Hometrack.

But London continues to distort the headline figure. Average house prices in London grew by 1.8% in March, the largest monthly increase in the capital for over four years.

Richard Donnell, director of research at Hometrack claims that, last year, levels of growth were being driven by the high value, prime housing markets of central London. He says the London effect is now beginning to ripple out to the commuter areas around the capital with average house price growth in East Anglia and the South East standing at 0.8% for March.

Away from those markets influenced by the London economy, house prices remain largely subdued, with growth across the remaining seven regions of the country ranging from 0% in Wales to 0.3% in the South West.

As property prices rise, rental yields are staying level with inflation, according to a survey by the Association of Residential Letting Agents (ARLA).

The price of rented accommodation has risen 10.7% in the three months to February 2007. This was mostly driven by rises in prime central London rented homes (12.4%) and the south-east (15.5%). Prices across the rest of the country dropped by 0.6%.