House prices recorded an annual increase this month for the first time in more than a year, with some areas of the UK showing strong signs of recovery, Nationwide has reported.
Although prices were flat month-on-month in March at £164,630 on average, they were up by 0.8% on a year ago, marking the first year-on-year rise since February last year.
Nationwide's study found huge variations in the performance of local housing markets, with prices up year-on-year by 15% in the London borough of Camden and in Cambridge, but down by 10% in Liverpool and Carlisle.
On a regional level, London recorded the strongest annual growth, with a 4.6% increase pushing average prices to a new high of £306,919 - beating their 2007 peak. The capital city has enjoyed strong interest from wealthy overseas buyers and some analysts have said that the crisis in Cyprus is likely to drive more money into London as people hunt for a "safe haven" in which they can invest their cash.
Wales was the second-best performing area of the UK, with prices up by 2.5% year-on-year to typically reach £132,971.
Meanwhile, house prices in Northern Ireland, which have seen strong falls since the economic downturn, showed much greater stability compared with a few months ago. Prices in Northern Ireland were down by 0.9% year-on-year at £108,610 typically. However, this drop is much less steep than the one at the end of 2012, when prices in Northern Ireland were down by 8.2% annually.
Scotland was the worst-performing area of the UK in the Nationwide study, with house prices down by 4.9% to reach £128,594 on average.
Elsewhere in the UK, prices rose by 1.3% year-on-year in the South West of England, 0.7% in the South East and 0.5% and 0.4% in the West Midlands and East Midlands respectively. However, prices in East Anglia dipped by 0.1% year-on-year and tumbled in several Northern regions, with a 0.5% drop in Yorkshire and Humberside, 1.6% in the North and 1.8% in the North West.
The report adds to evidence that Government efforts to unblock the housing market are having an impact. Lenders and estate agents have been reporting uplifts in activity, mortgage availability has increased sharply and loan rates have been slashed since the Government launched its Funding for Lending scheme (FLS) last August. House prices are likely to get a further boost from a multibillion-pound scheme called Help to Buy, which was unveiled in the Budget to help more people get on the property ladder or move up it with a 5% deposit.
Robert Gardner, Nationwide's chief economist, said that looking ahead, the potential impact of Government schemes is hard to measure because of the housing market remaining "uncertain", partly due to the wider tough economy. He said the flat month-on-month change for house prices reflected a usual seasonal pattern.