House prices show March increase

The average house in the UK now costs over £175,000

House price inflation has continued to rise in March, according to the latest survey from the Halifax bank.

It says prices rose by 0.9% during the month, pushing up the annual rate of house price inflation to 6.2%.

But the bank added that there were signs that housing market demand was "beginning to level off" due to rising utility and council tax bills.

The Halifax's calculations indicate the price of the average property in the UK topped £175,000 for the first time.

Pressure on householders' finances from the recent hikes in utility and council tax bills are all expected to curb demand Martin Ellis, Halifax

The Halifax also revealed that the gap between property prices in the north and those in the south is narrower than it has been for more than eight years.

Average house prices in the south of the UK are currently £79,400 higher than those in the north.

Losing impetus

The annual rate of house price inflation across the UK has now been rising steadily since last summer, with the north west, Yorkshire and Wales leading the charge.

At the other end of the scale, house prices have grown the least, over the past year, in the south-west, south-east and east Midlands regions.

But there are signs that the market maybe losing some impetus, Halifax said.

"The weakening in the labour market, the continuing high level of house prices in relation to earnings and pressure on householders' finances from the recent hikes in utility and council tax bills are all expected to curb demand," Martin Ellis, chief economist at the Halifax, said.

Halifax expects the average property prices to increase by 3% during 2006.

Meanwhile, Nationwide said that during the first three months of the year house prices rose throughout all parts of the UK.