The annual rate of house price inflation has declined to 7.8% in April. This is very close to the historical long-term average of 8%, according to Halifax in its April housing survey.  

All houses, all buyers index (1983=100) Index (seasonally adjusted) 529.5 Monthly change 0.0% Annual change 7.8% Standardised average price (seasonally adjusted) £163,615

House prices were unchanged in April the bank said. Overall, there had been no movement in UK house prices since January.

The number of loans approved for house purchase increased for the second successive month in March, according to the Bank of England, but was still 26% lower than a year ago. RICS reported a firming in housing activity in the first quarter of 2005 with newly agreed sales showing little change in March following two successive monthly rises. This pattern is confirmed by Halifax Estate Agents.

Chief economist at Halifax, Martin Ellis said: "The latest indicators also provide further evidence that activity levels are stabilising following a sharp downturn in the second half of last year. As a result, we appear to be entering a period of broad stability, particularly in terms of market activity."

"Sound fundamentals, particularly in the shape of the ongoing strength of the labour market and the low level of interest rates, should continue to underpin the market."

The house price to earnings ratio has dropped from a peak of 5.63 in September 2004 to 5.48 in February, according to the latest data.

Martin Ellis said: "The easing in the house prices to earnings ratio over the past few months is expected to be sustained as earnings rise more quickly than house prices. This will improve affordability for first-time buyers, enabling more to get a foot on the housing ladder. This too will help to support the market."

Halifax calculates that the total value of household sector wealth in the UK increased by £589 billion (12%) during 2004 to £5,511 billion. The increase was due to a combination of further house price rises, which boosted net housing equity by £335 billion (16%), and the continuing recovery in share prices, which increased financial wealth by £270 billion (9%).