Average cost of a house passes ?150,000

The housing boom is gathering pace, with prices last month rising another 2.2% - or £105 a day - according to Britain's biggest mortgage lender.

The latest surge in values has lifted the average price of a home through the £150,000 barrier for the first time, the Halifax said.

Last month's increase means that the annual rate of price growth is now running at 18.5%, after the fourth monthly increase in a row - in November, the annual rate stood at 14.1%.

The strength of the data is likely to increase the likelihood of an interest rate rise next week. If borrowing costs do increase when the Bank's monetary policy committee meets on Thursday, this would be the third rise since the beginning of November.

Martin Ellis, Halifax's chief economist, said: "We haven't really seen the interest rate rises bite at all so far."

Predictions that the issue of first-time buyers being priced out of the market would put a brake on the booming market have so far also proved unfounded. First-time buyer activity has strengthened, and it is the clamour for properties combined with shortages of homes for sale that is continuing to push prices upwards.

The Halifax's prediction at the end of 2003 that prices would rise 8% this year arguably seems in need of revision, but the bank said it was leaving the forecast unchanged for the moment. Earlier this week, rival lender Nationwide increased its prediction for this year's house price growth from 9% to 15%.

An average British home is now worth £151,467 - some £3,280 more than a month ago and £24,000 more than in March 2003, when the typical value was £127,186.

"House prices rose by 2.2% in March, broadly in line with the average increase during the previous three months, as strong demand and tight supply conditions continue to drive house prices up," Mr Ellis said.

Some of the indicators suggest the market is healthier than many might have imagined. While ever-rising prices have pushed home ownership out of the reach of many would-be buyers, the past few months have nevertheless seen a robust rise in house sales, with an average of 120,000 property transactions a month in England and Wales in the three months from December to February. This is 11% higher than the previous three months and above the 114,000 monthly average over the past 10 years.

"These figures confirm the momentum in the housing market," the Halifax said.

But while the number of properties sold has risen, the stock of properties available on estate agents' books has fallen, contributing to the continuing strength of house prices.

Meanwhile, although much has been made of the plight of first-time buyers, the latest industry figures reveal that there was a strengthening in first-time buyer activity during February, with an increase in both the number and the proportion of mortgage loans being made to such purchasers.

As a proportion of all buyers taking out a mortgage, first-time buyers rose from 27% in January to 30% in February, but this figure remains the lowest for 30 years, and is significantly below the 47% long term average.

This year's surge has taken much of the country's property market into uncharted territory. Regionally, the north still leads the way, with the biggest price rises enjoyed by homeowners in northern England and Wales during the first three months of this year. This has led to a narrowing in the north-south divide.