House prices in March rose by 0.5 per cent according to the latest figures released by Halifax.

However, the Halifax house price index shows the rise was offset by the fall of 0.5 per cent recorded in February.

The inflation in house prices was recorded at below ten per cent for the first time since November 2001.

Martin Ellis, chief economist, attributed the slow movement in the house market to the increase in interest rates between November 2003 and August 2004 as well as the problems faced by first time homebuyers.

He added that there were signs that activity levels are now stabilising and house prices are broadly static at a national level.

The maximum price rises in the first quarter of the year were recorded outside England.

Houses in Scotland, crossing the £100,000 barrier for the first time, showed the highest price gains followed by Northern Ireland.

London house prices remain highest where the average house price is £241,918 rising by 0.1 per cent in the first quarter.

Following a decline in the second half of last year, Halifax figures provide evidence that market activity is now beginning to stabilise.