ASKING prices for homes increased by an average of 0.6 per cent during the past four weeks and are nearly back to the record levels of last summer.

Average prices increased by £1,132 during the past month on top of the previous month's sharp rise of £4,321, or 2.3 per cent, the Rightmove property index reported.

The increase nearly takes the average price at which properties are marketed to the peaks seen in July last year, wiping out all but £1,236 of the declines that have occurred since then, Rightmove said.

Miles Shipside, Rightmove commercial director, said: "In the second half of 2004, sellers began to trim asking prices in response to slowing market conditions, as buyers reacted to the Bank of England's successive rate rises.

"However, it was not a big outbreak of common sense, and asking prices only fell by a total of about 3.4 per cent from the peak of £196,198 to the trough of £189,509."

The number of properties coming on the market is nearly twice that coming off - the largest imbalance in three years.