House prices rose strongly in February after falling at the start of the year, new figures show.

House prices rose strongly in February after falling at the start of the year, new figures show.

Halifax's latest House Price Index reveals that house prices grew by 1.4 per cent in February 2006, offsetting January's fall of 0.2 per cent.

The average house price is now £173,498, according to Halifax, which is 5.5 per cent higher than in February 2005.

UK house prices are predicted to rise by three per cent in 2006, broadly in line with the predicted rise in retail price inflation. The annual rate of house price inflation is expected to fall as prices rise at a slower pace than in the second half of 2006.

Halifax's chief economist Martin Ellis said that low interest rates and high employment will "continue to underpin a healthy level of housing demand over the next few months".

However, he also stated: "The mixed pattern of monthly price rises and falls is a typical feature of a slower housing market."

Conversely, Nationwide recorded a 0.2 per cent fall in house prices in February but a 1.5 per cent rise in January.