House prices increased by 0.5% during March, offsetting February?s 0.5% fall, the latest index from the Halifax has shown.
Slight rises and declines have been reported over recent months, but overall, there has been virtually no change in UK house prices since September 2004, and the annual rate of inflation has fallen to below 10% (9.7%) for the first time since November 2001, the mortgage lender said.
It also noted that regional house prices have been more volatile over the past three months than national figures suggest. The strongest gains were all outside England: Scotland?s prices have increased since the start of the year by 6.1%, pushing the average price through the £100,000 barrier for the first time, while Northern Ireland and Wales also saw strong growth.
London experienced a 0.1% increase in prices over the first quarter of 2005, a change which Halifax says shows that that the market in the capital may be stabilising.
A pick up in loan approvals reported by the Bank of England last month, as well as an upturn in sales reported by Halifax Estate Agents, shows that activity may be stabilising following a sharp drop in the second half of 2004, Halifax said.
?The increase in interest rates between November 2003 and August 2004, and the difficulties facing potential first-time buyers in purchasing a property, has caused the housing market to slow since mid 2004,? said Martin Ellis, Halifax?s Chief Economist.
?The ongoing good health of the UK economy and the associated strength of the labour market, together with historically low interest rates and a shortage of housing supply, however, appear to be limiting the extent of the downturn. There are increasing signs that activity levels are now stabilising and house prices are broadly static at a national level,? he added.