Annual growth of 2.7% puts a spring in the step of the UK house market

The latest data and analysis from Halifax has revealed that house prices in the last three months to March were 2.7% higher than in the same three months a year earlier, edging up from the 1.8% annual growth recorded in February. According to the lender's figures, the average price in March was £227,871.

House prices in the latest quarter (January-March) were -0.1% lower than in the preceding three months (October-December), the second consecutive decline on this measure. On a monthly basis, prices grew by 1.5% in March this follows a 0.5% rise in February; monthly changes can be volatile.

Mortgages in the UK are at their most affordable level in a decade.

Russell Galley, Managing Director, Halifax, said: "House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high.

Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year. This lack of direction in the housing market is in stark contrast to the continuing strength of the UK jobs market. The unemployment rate is now the joint lowest since 1975 and in the three months to January there were 402,000 more people in work compared to a year earlier.

In the coming months we expect price growth to remain close to our prediction of 3% despite the very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale will also support price growth.