House prices have shown only a modest rise on a year ago, with first-time buyers facing much steeper increases than existing owners, official figures showed today.
The typical house price was £224,473 in February, a 0.3% year-on-year rise, the Office for National Statistics (ONS) said, as analysts warned that the weak economy and low consumer confidence is likely to drag prices down in the coming months.
Prices paid by first-time buyers were typically £166,916, 1.3% higher than in February 2011, but those paid by existing owners in the 12 months to February remained flat at just under £260,000.
Analysts suggested the typical price increase for first-time buyers was due to the ending of a two-year stamp duty holiday for them last month, with estate agents reporting a surge in interest from this sector of the market before the concession on properties worth between £125,000 and £250,000 finished.
The latest house price figures represent a monthly rise of 0.2% across the UK, following a 0.5% month-on-month fall in January.
However, large regional variations were found. Scotland saw the biggest year-on-year rise, with a 1.1% increase to reach £177,354, while prices in England typically increased by 0.4% to average £232,485.
Northern Ireland saw prices drop sharply by 9.7% to £136,263, while Wales saw decreases of 0.5% on average over the 12 months to reach £151,839.
Price increases in England over the year were driven by London, which saw the biggest rise at 1.7%, as well as the South generally, while the North East saw a 5% fall.
Howard Archer, chief UK and European economist at IHS Global Insight, said prices were expected to drift downwards in the coming months, "in the face of generally weak economic fundamentals and low consumer confidence".
He said: "We expect house prices to fall by around 3% by the end of 2012. Housing market activity is still low compared to long-term norms.
"And although latest indicators suggest overall that the economy returned to limited growth in the first quarter, the economic fundamentals still look far from rosy for the housing market with unemployment high and likely to rise further, earnings growth muted, debt levels high and the growth outlook still very uncertain."
He said prices had clearly been helped this year so far by first-time buyers looking to complete deals before the stamp duty concession ended.
Mortgage availability is expected to decrease in the coming months as lenders tighten up their criteria further, making it tougher for consumers to borrow.
A series of announcements of mortgage rate hikes have been made in recent months affecting more than a million borrowers in total, with lenders blaming the weak economy and the increased cost of funding a mortgage.
The monthly index was previously published by the Department for Communities and Local Government.