Nationwide has said that house price growth bounced back strongly in March, following a lull in February.

House prices rose by 1.1% in March taking the annual rate of price growth to 5.3%, bringing the price of a typical house up to £162,083.

This is more than £8,000 higher than at this time last year ? the equivalent of a price rise of £22 per day.

After a brief pause in February, prices back on strong upward trend added Nationwide.

Fionnuala Earley, Group Economist for Nationwide said in her report: “The pick up in prices in March continues the upward trend we have seen since the autumn, which has been supported by a solid return of buyers. Activity levels fell back to 115,000 in February but remain remarkably strong.

There were 115,000 house purchase approvals in February, well above the 10 year monthly average of 100,000. Activity this strong has not been seen since the late Spring/early summer of 2004 when annual house price growth was almost 20%.”

But there is a sting in the tale, deteriorating affordability and higher utility bills could act as a brake on price rises the building society warned. Costs such as Utility and council tax bills which continue to rise all are placing an impact on affordability.

Nationwide also said that the Budget brought little help to first time buyers. “Against expectations the Chancellor raised the level of the lowest stamp duty threshold limit by £5,000 from the £120,000 announced last year. But this 4% increase is below the annual rate of growth of house prices over the last year and, while a move in the right direction, remains far behind its value in real terms compared to when it was first introduced in 1993. Had the limit risen in line with general house price inflation it would have now been 220% higher at £192,000.

But if it had increased in line with the rate of growth of typical first-time buyer properties, it would be 235% higher at over £200,000. Given the average house price is well above even the new threshold, only about 2% of buyers will benefit from the revision - only those buying property worth between £120,001 and £125,000.

The slab structure of the tax means that someone buying a property worth £125,001 will face a bill of £1,250.01, but someone buying for £1 less faces no bill at all. Because of this high marginal tax rate we believe that the distribution of transactions within the price bands is distorted leading to a higher proportion of transactions at or just below the threshold, and a lower proportion just above it.

Taking this distortion into account and based on transactions and prices over the last year, we estimate that only about 30,000 homeowners would benefit from the Budget change. And, with prices continuing to rise, the value of the increased threshold is already being eroded.

The average value of a first-time buyer property in the UK is £131,903 - already above the new threshold level. Furthermore, given the variation in house prices across the regions, far fewer first-time buyers in the South, where affordability is more stretched, will benefit from the change.”