HOUSE prices lifted by 8.5 per cent year-on-year in April as demand from home buyers remains strong, Halifax has reported.
But on a month-on-month basis, values dipped by 0.2 per cent, marking the second monthly fall in a row and taking average prices to 177,648.
Halifax said monthly changes can often be volatile and price movement compared with the previous quarter tends to be more reliable when working out the underlying trend in the market.
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On this measure, prices have increased by 2.3 per cent compared with the preceding three months, which is in line with the quarterly trend over the past 11 months.
The annual pace of increase is slightly down on an 8.7 per cent year-on-year rise in March, but Halifax said upward pressure on prices is still coming from demand continuing to grow at a stronger pace than the supply of homes coming up for sale.
A mortgage lending clampdown came into force on April 26 and some experts have said this could slow down the market. Applicants face being asked more detailed questions about their spending habits under the Mortgage Market Review (MMR) rules.
There have also been some signs of mortgage rates edging up in recent weeks. Much of this has been put down to increases in swap rates, which lenders use to price their loans, but some analysts have also suggested lenders might consider putting rates up a bit to stem the tide of mortgage applications while they adjust to the MMR changes.
Stephen Noakes, mortgages director at Halifax, said: "On an annual basis, housing demand still remains strong. Housing demand continues to be supported by an economic recovery that is gathering pace, rising consumer confidence, low interest rates and wage growth finally beginning to outgrow consumer prices.
"However, with supply of properties being slow to respond to market conditions, stronger demand in the past year has resulted in upward pressure on house prices."