House prices rose by 1.5% in March, as opposed to only 0.1% in February, the biggest monthly increase for 18 months.

Confidence seems to have returned

With confidence returning to the housing market, more houses are coming to the market.

"Estate agents and surveyors have reported an upturn of activity in the last couple of months," according to David Parry of the Nationwide Building Society, which conducted the survey.

Estate agents have reported strong interest from first-time buyers and investment buyers, with activity also picking up in the North of England.

"Some properties are coming on the market one day and being sold the next," according to one estate agent.

The average house price is now £68,308, and the Nationwide expects the buoyancy in the housing market to continue through the spring selling season. House prices are rising at annual rate of 7.6%, still below the 12.3% recorded one year ago.

"With interest rates at their lowest level for nearly 30 years, and real house prices around 25% below their long-term trend, affordability remains extremely good," Mr Parry added.

The interest rate cuts seem to have overcome fears of recession, although further blows to consumer confidence as the year progresses could not be ruled out.