House prices in the first quarter of 2015 were 2.6% higher than in the final quarter of 2014, the Halifax has reported.
The quarterly rate of change increased for the third consecutive month. It is now at a similar rate to September 2014 (2.7%) prior to a marked slowdown in the last three months of 2014.
Meanwhile, house prices increased by 0.4% between February and March, offsetting February’s 0.4% fall.
Annual price growth, however, fell slightly again, from 8.3% in February to 8.1%, and is comfortably below last July’s peak of 10.2%.
Martin Ellis, the Halifax’s housing economist, said: “The recent return to real earnings growth for the first time in several years, very low mortgage rates and last December’s stamp duty changes are supporting housing demand. The rising level of house prices in relation to earnings should, however, curb house price growth and activity.
“The annual rate of house price growth, which has continued to ease in the first quarter of 2015, is forecast to end the year at 3-5%.”
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), added: “House price growth has been fairly consistent in the first quarter of 2015, with prices rising at a far more relaxed pace compared to 2014. This is comforting news for first-time buyers, who risked being priced out of the property market should last year’s rate of growth been upheld.
“Housing demand continues to hold strong as consumers make the most of record low mortgage rates and beneficial changes to stamp duty. The recent recovery of wage growth has also helped to make homeownership a more affordable prospect as consumers’ earnings begin to catch up.
“However, there still remains a dangerous imbalance in the supply of new homes that risks driving up house prices in the long-term. In the run-up to the general election, clear policies on housing and the creation of new homes are needed to prevent the current shortage from worsening.”