The increase lifts the annual rate of increase to a four-month high of 6.5%. This was the first monthly increase in house prices reported by Halifax since November. The annual increase had reached a six-month low of 5.2% in February from 7.6% in November, the highest level since June 2016.

Evidence of the recent underlying slowdown in house prices came from the three-month/three-month rise slowing to 0.3% in March, the weakest since last July, from a peak of 4.0% in October.

House prices had strengthened over the second half of 2020 as market activity was buoyed by the release of pent-up demand following the easing of restrictions from mid-May, people re-assessing their housing needs in the wake of lockdowns and the temporary raising of the Stamp Duty threshold.

However, while still relatively elevated, housing market activity had come off its highs early on in 2021 – before further supportive measures were included in the Budget on 3 March.

Early evidence suggests the measures – including an extension of the Stamp Duty threshold and a low-deposit mortgage scheme – have given the housing market renewed impetus. The extension of the furlough scheme will also likely help the housing market.

Russell Galley, managing director, Halifax, said: “The continuation of government support measures has been key in boosting confidence in the housing market. The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.

“Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic. A shortage of homes for sale will also support prices in the short term, as lower availability always favours sellers.

“However, with the economy yet to feel the full effect of its biggest recession in more than 300 years, we remain cautious about the longer-term outlook. Given current levels of uncertainty and the potential for higher unemployment, we still expect house price growth to slow somewhat by the end of this year.”

Economic forecaster the EY ITEM Club believes the housing market is likely to see near-term resilience and some modest firming of prices – even though it suspects that the recent strength of the housing market has been outsized relative to economic fundamentals, and the strength of prices will ultimately prove unsustainable.

The EY ITEM Club suspects house prices will be flat year-on-year by early 2022. Some quarters of falling prices are likely at the end of 2021 and early on in 2022 as the Stamp Duty benefit ends, unemployment rises, pent-up demand wanes, and amid growing expectations that interest rates could begin to rise.

Howard Archer, chief economic advisor to the EY ITEM Club, said: “The rise in house prices in March reported by Halifax contrasts with softer data from Nationwide. Nationwide reported that house prices edged down 0.2% month-on-month in March.

“House prices had previously regained upward momentum in February when they rose 0.7% month-on-month after a dip of 0.2% month-on-month in January. The year-on-year change in house prices slowed to a five-month low of 5.7% in March from 6.9% in February and a peak of 7.3% in December, which had been the highest since November 2014.

“The three-month/three-month growth rate in house prices slowed appreciably to 1.1% in March, which was the lowest rate since last August. This was down from 1.8% in February, 2.2% in January, 2.9% in December and a peak of 3.6% in November, which had been the strongest three-month/three-month gain since October 2009.”