This was the eighth rise in the last nine months and the March rises pushed prices up 9.1 per cent since hitting their lowest point in April 2009.

Martin Ellis, housing economist, said the rate of growth was still slowing overall after the return of the £125,000 Stamp Duty threshold and poor weather at the start of the year.

He said: “There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices.”

The average house price is now £168,521.

In addition, Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – fell by a seasonally adjusted two per cent between January and February following a much larger decline of 17 per cent in the previous month.

However, the temporary increase in the lowest stamp duty threshold announced in last month’s Budget will mean that most first-time buyers do not pay the tax.

At £250,000, more than nine in ten first-time buyers would have been exempt from paying stamp duty in 2009 compared with just over one in two if the lowest threshold had been £125,000. The southern
regions of England will benefit most. Around three-quarters of first-time buyers in Greater London and the South East will be removed from the stamp duty tax net as a result of increasing the threshold from £125,000 to £250,000.

Change to Personal Allowance

No changes to basic and higher rates, however from April 2010 there will be an additional rate band of tax. In April 2009 Budget the Government announced that it would be introducing a new 50% rate of tax on income above £150,000 from April 2010.

In April 2009 Budget the Government announced that with effect from 6th April 2010 individuals receiving an income of more than £100,000 per year would face a cut in their Personal Allowance. This would reduce by £1 for every £2 of income above £100,000.

This was restated in the March 2010 Budget.

Inheritance Tax

The nil rate band of Inheritance Tax will be frozen at £325,000 until 2014/2015.

Stamp Duty Allowance

For first time buyers Stamp Duty Allowance will double from £125,000 to £250,000 (from midnight on 24th March).

This is anticipated to be funded by a new 5% band of tax being introduced in the 2011/12 tax year on properties sold for £1,000,000 +.

Capital Gains Tax

The current CGT rate remains unchanged. However, Entrepreneurs’ Relief for CGT will be extended from £1m to the first £2m of qualifying gains made over a lifetime. This takes effect from April 2010.

Annual ISA limit

As announced earlier, for savers, from April 2010 the annual ISA limit will rise from £7,200 to £10,200. Future ISA limits will be indexed by RPI.

Winter Fuel Payments

The Government will guarantee payments for another year – this will be at least £250 for pensioners (£400 for those over-80′s).

Business Rates

Business rates will be cut for one year from October for SMEs (Small and Medium Enterprises).

Tax credit

Individuals over the age of 60 will now be eligible for Working Tax Credit provided they work for at least 16 hours a week.

National Insurance

In the March 2010 Budget it was restated that employee, employer and self-employed rates of National Insurance contributions (NICs) will increase by 0.5% from April 2011 in addition to the 0.5% increase announced in 2008. However the level at which people start to pay NICs will increase in April 2011 by £570 above the level previously announced.

Personal pensions tax relief

In their April 2009 Budget, the Government announced that with effect from 6th April 2011, tax relief on pension contributions would be restricted for those with gross income in excess of £150,000. These are referred to as the ‘permanent changes’.

The Act also included ‘anti-forestalling restrictions’ to prevent higher earners from paying unusually large pension contribution to take advantage of current tax benefits prior to the permanent changes coming into play in 2011.

Alongside the March 2010 Budget, the Government has outlined its plans for introducing these changes.

If you buy a property in the UK over a certain purchase price you have to pay Stamp Duty Land Tax (SDLT). This is charged on all purchases of houses, flats and other land and buildings.

If you buy either a freehold or a leasehold property and the purchase price is more than £125,000, you pay SDLT of between one and four per cent of the whole purchase price. If the purchase price is £125,000 or less you don’t pay any SDLT.

See the table below for more detail.

SDLT Disadvantaged Areas Relief

If you buy property in an area designated by the government as ‘disadvantaged’ you may qualify for Disadvantaged Areas Relief. In this case the threshold for SDLT is £150,000.

Disadvantaged Areas Relief did not apply for residential property purchases between 3 September 2008 and 31 December 2009 inclusive. The threshold during that period was £175,000 which is higher than the previous Disadvantaged Areas Relief threshold. You can check the HMRC website to see if the property you are buying is in an area designated as disadvantaged.

“Greater London was the best performing region in the quarter; prices rose by a seasonally adjusted 3.4%. This increase pushed the annual rate of change up from -1.9% to 7.0%, making London the best performing region over 2009.

“Outside of London, the East Midlands saw the strongest quarterly performance within the English regions, with a 2.8% rise in prices over the quarter, bringing the annual rate of change up from -5.4% to 2.5%. The Outer Metropolitan and Outer South East regions continued to see above average growth in the quarter and were the second and third best performing regions, with annual growth of 6.4% and 5.5% respectively.

“The northern regions generally saw weaker growth, in particular the North where prices rose just 0.4% in the quarter. The North was also the only English region not to see prices rise across the year as a whole, with an annual price change of -2.0%.

“House prices in Scotland rose 1.9% during the quarter, slightly above the UK average. This was enough to push the annual rate of change into positive territory, with prices up 1.0% compared to the fourth quarter of 2008. Quarterly price growth in Wales remained relatively weak in the fourth quarter, with a 0.9% rise recorded, leaving average prices marginally lower than one year earlier.

“Reversing the large increase seen in the third quarter, prices in Northern Ireland fell by 6.8% in the fourth quarter. On an annual basis, house prices were down 6.7%, a modest improvement from the 8% year-on-year fall in the third quarter. Northern Ireland remains the worst performing UK region.

Wales top performing UK country over last decade

“Despite the sharp house price falls seen in 2008 and the first half of 2009, the 2000s has generally been a very strong decade in terms of house price growth. In nominal terms, house prices in the UK rose 117% between 1999 Q4 and 2009 Q4. Taking into account overall retail price inflation over the period, prices have risen by 68% in real terms, the strongest decade on record. This compares with a 14% fall in real terms during the 1990s.

“Wales has been the top performing country over the 2000s; house prices have risen 82% in real terms.  This sharply contrasts with the 1990s, where Wales saw prices fall by 24% in real terms.

“England overall has seen the weakest growth over the 2000s of 65%, although this has varied widely across the regions. Within England, Yorkshire and Humberside has seen the strongest growth, with prices rising 84% in real terms, whilst the Outer Metropolitan region has experienced the weakest growth, with a 51% increase.

The strong growth seen in Yorkshire and Humberside might reflect that it started the decade as one of the most affordable regions, with a house price to earnings ratio of 3.0 (compared with the UK average of 3.6 in 2000 Q1).

“Whilst the strong housing market performance of the 2000s is good news for homeowners, it is less positive for those looking to get on the housing ladder. Affordability has improved since the peak in house prices in 2007, but we will enter 2010 with house price to earnings ratios across the regions at a much higher level than the start of any other decade.”

The MPC also voted to continue with its programme of Quantitative Easing (QE) – which was extended by an additional £25 billion last month to £200 billion – a move welcomed by businesses who believed that the economy would stall without it.

According to the report 1.61 million people said they were looking to buy in areas other than London. With average monthly rent coming in £434 for these regions, and average mortgage payments on a property with a 25% deposit coming in at £382, anyone buying could see themselves making a £52 saving each month.

New research has revealed that buying a house is cheaper than renting in every region in the country apart from the capital, where renting is still a cheaper option.

The report suggests that renters outside the capital could save a collective £1bn over the next 12 months if they bought a property now, rather than spending their money on renting – appealing if you can afford the deposit.

Savings made by buying a property differ around the country, with buyers in Wales set to save £90.91 a month, while those in the North West would save £87.43 and renters in Yorkshire & Humberside could save £77.06 if they bought. The opposite can be said of people looking to buy in London, who would see £466.19 added to their outgoings a month.

While typical first-time buyer flats and terraced houses have seen a decrease in value of 9% over the past 12 months, according to Abbey Mortgages, mortgage lending has become tighter, and first-time buyers still need to find huge deposits in order to secure the best mortgage deals.

But with huge deposits needed to secure a mortgage, is it really that easy for first-timers to get their foot on the first rung of the property ladder?

According to Abbey, the average price for a typical first-time buyer property outside of London is £92,861. With most lenders requiring at least a 25% deposit, borrowers would need to stump up a whopping £23,215 to reap the rewards of buying – a sum many first-time buyers would struggle to find.

“Our latest research shows there is hope for first-time buyers. It’s now cheaper in all bar one of the regions to buy rather than rent, [which] shows that saving for that all important deposit is so worthwhile,” says director of Abbey Mortgages, Nici Audhlam-Gardiner.

With recent house price reports revealing that property prices are starting to rise again, the end of the stamp duty holiday in sight, and a lack of affordable mortgages available for first-time buyers, it may be time to look at alternatives.

Buy with friends
This could be the answer, if you can’t afford to buy on your own, buy with friends. You’ll be able to borrow more and buy a better property. But, while buying with friends provides a great opportunity to get on the property ladder, there are important factors to consider.

Generally when people become co-owners of a property they opt to be what is known as “tenants in common”. This means that each person has shares in the property. Such an agreement should take into consideration how much money each person has put into the property – both in terms of deposit and how much they pay off the mortgage each month.

Everyone is jointly responsible for the whole mortgage, so each person needs to make sure that if anything happens in their lives – such as long-term illness or job loss – they have a back-up plan to ensure their share of the mortgage is paid. There are insurance policies that can help with this.

It’s worth considering drawing up a legal agreement before the purchase is complete to cover all eventualities, such as if someone decides to move out or falls on hard times.

Buying off-plan
You can usually bag a discount if you decide to buy off-plan. Developers often sell part of their development before the building work is complete, to generate sales in order to complete the rest of the development.

If you buy off-plan you could be looking at as much as a 20% discount on the asking price. You’re basically agreeing to buy a property on the basis of plans, drawings and virtual tours, which may sound risky, but it’s common practice with many larger property developers.

Generally you’ll be asked for a down-payment of between £500 and £1,000 to reserve the plot. Exchange is usually 28 days later when you need to provide a 5-10% deposit, and then final payment will be on completion of the build – usually six to 18 months later, so there’s plenty of time to sort out your mortgage.

Bank of mum and dad
The Council of Mortgage Lenders (CML) put the average first-time buyer house price at £123,000 in July 2009. Raising a deposit is the biggest obstacle when it comes to buying a first home.

The minimum deposit required for a property costing this much would be at least 10% (£12,300) or up to 25% (£30,750) to obtain some of the best rates. So it comes as no surprise that some First Time Buyers, revealed that they would be turning to the “bank of Mum and Dad” to help finance their deposit.

Other ways parents can help out with the purchase of a property is by acting as a guarantor to the mortgage company, or even entering into a joint mortgage. It’s worth taking advice on any of these suggestions as there are tax implications.

Shared ownership
In essence participants of the scheme buy a share of a property through a mortgage and pay for the rest through a capped-rate rent paid to a housing association. The size of the share varies but usually starts at 25%. Obviously the higher the share, the less rent there is to pay. The plan is that over time, you incrementally increase your share (known as “staircasing”) until you – and your mortgage provider – own the property outright.

Homebuy Direct is the latest scheme to be launched where buyers are offered an equity loan of up to 30% of the purchase price, co-funded by the Government and the developer. HomeBuy Direct is aimed at first-time buyers where households earn less than £60,000 per year.  

To apply for a scheme, find out if whether you are eligible to buy a shared-ownership property, or to seek further information visit Homebuy.org.uk.

The Index shows that house prices rose by 1.6% in September. Over the last 3 months (Quarter 3) they have risen by 2.8%, the first quarterly rise for two years (2007 Quarter 3) and the biggest since 2007 Quarter 1 (2.9%).

It is the third consecutive month house prices have gone up, giving an annual change of -7.4%, up from a low of -17.7% in April.

Martin Ellis, housing economist, said: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. The marked improvement in affordability due to the reduction in both property prices and interest rates since mid 2007 has been a key factor in stimulating higher demand.”

“Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale. This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.”

Martin Gahbauer, Nationwide’s Chief Economist, said: “The 3 month on 3 month rate of change, generally a smoother indicator of the near term trend, rose from 3.3% in August to 3.8% in September, the highest level since August 2004.

He added: “At £161,816, the average price of a typical UK property was essentially unchanged from a year earlier, representing the first time since March 2008 that the year-on-year rate of change has not been negative. Over the first nine months of 2009, the seasonally adjusted index of house prices has risen by 4.1%.”

“One reason to remain cautious about the outlook for house prices is that turnover in the market is still well below normal levels. The housing turnover rate – measuring the percentage of the private sector housing stock changing hands on an annualised basis – fell to only 3% at the end of 2008. Although the turnover rate has since recovered to nearly 4%, there is still quite some way to go before turnover reaches the pre-downturn level of between 7% and 8%.

Michael White, chief executive of online mortgage advisers Email Mortgages.com, said: “To talk of an average UK house price is always something of a red herring given the UK is very much a regional housing market – some homeowners, for example, those in the London commuter belt, will have seen their property bounce back strongly since the large falls of last year, while others have only seen a slight house price recovery.  One must expect that the recent house price increases, if they are to be maintained at all, will only be in very small increments and this will be the pattern for the foreseeable future.”

White said “the real issue for the UK housing market continues to be the low level of mortgage lending by the banks; a recent Bank of England Credit Conditions Survey for quarter three outlines what anyone working in the mortgage market has known for some time, that lenders have not increased lending to businesses or individuals as previously promised, instead lending has been cut.  Given the small number of lenders currently active in the market it is therefore unsurprising that many potential house purchases are not going ahead because of the difficulty accessing mortgage finance; a particularly acute problem for first-time buyers.”