The outlook for the housing market remains good

The Halifax

This compares with a rise of 1.6% in February.

Prices are also up 4.1% from a year earlier, relative to a rise of 3.4% year-on-year in February.

The rise is also the third successive monthly increase, following a contraction of 1% during the last quarter of 2000.

Mortgage cuts

The Halifax attributed the continuing rises to the recent cuts in mortgage rates which have helped to strengthen the market.

Figures from the Inland Revenue figures also show a modest pick-up in property transactions, said the building society.

"The outlook for the housing market remains good", said The Halifax.

It pointed to signs that the UK economy continues to weather a global slowdown, including the recent fall in unemployment to below one million.

The Halifax also mentioned the possibility of further interest-rate cuts as a boost for the housing market in 2001.

The Bank of England kicks off a two-day meeting on Wednesday to review the country's 5.75% interest rates.

Any cut would benefit mortgage holders on deals charging variable interest.

Nationwide data

The Halifax's figures differ from Tuesday's data from the building society Nationwide, which said house prices rose 7.2% percent in March compared to a year ago.

In March alone, house prices increased by 1.4%, according to the building society.

Nationwide also argued that falls on the London's stock markets may have inhibited the capital's property market by denting confidence among the high-earning City professionals.

It also forecast that the foot-and-mouth crisis could cut national annual house prices by as much as 0.5%.

The disease could dissuade house hunting in rural areas and has a short-term impact on jobs in the farming and tourist industries, Nationwide said.