House prices 'down 1.9% in March'

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Prices fell at an annual rate of 17.5% during the month, compared with record annual drops of 17.7% in February - based on Halifax's preferred measure of comparing prices during the previous three months with the same period a year earlier.

The figures contrast with those reported by Nationwide on Thursday, which showed a surprise 0.9% jump in house prices during March.

Economists cautioned against reading too much into the Nationwide price rise, warning that while the market may have bottomed out, any recovery still remained a long way off.

The latest Halifax figures are more in line with expectations for the market at a time when the country is in recession and unemployment is rising.

But despite the steep monthly price fall, which followed a drop of 2.3% in February, Halifax said there were "tentative signs that activity may be beginning to stabilise".

With the average property in the UK now costing £157,326, the house price to earnings ratio - a key measure of affordability - has fallen to 4.34, its lowest level since early 2003 and down from a peak of 5.84 in July 2007.

Recent steep interest rate cuts have also reduced the amount of income taken up by mortgage repayments from a peak of 26.9% in October last year, to a three-and-a-half year low of 22.6% last month.

Figures from the Bank of England released earlier this week showed the number of mortgages approved for house purchase jumped by 19% during February, while a report out on Thursday signalled that the banks and building societies thought they would increase mortgage lending during the coming three months.

Halifax added that house prices were around 2.7% lower during the first quarter than they had been in the previous one, compared with falls of 5% to 6% recorded during each of the previous three quarters.