House prices have increased by two per cent in April according to a latest house price report.

House prices have increased by two per cent in April according to a latest house price report.

The Halifax House Price Index indicates that April's rise contributes to a figure of 4.4 per cent growth in the first four months of 2006 and eight per cent growth since March 2005.

The annual figure represents the largest growth for 13 months, with Halifax expecting that house price inflation may increase again over the next few months.

Halifax's index also shows that housing market activity has risen steadily in recent months, with Halifax estate agents having registered the sixth successive rise in sales agreed on an annual basis in March.

Housing demand has been well supported by a combination of a strengthening economy, high levels of employment and low interest rates.

Martin Ellis, chief economist at Halifax, said: "While the market may remain relatively buoyant over the coming months, we expect the recent softening in the labour market and the continuing high level of house prices in relation to earnings to curb demand."