House prices fall in March

The figures were in stark contrast to data from rival lender Nationwide on Thursday, which showed house prices rose by 0.9 percent last month, the first increase since 2007.

In February, house prices fell 2.3 percent on the month for a 3-month annual decline of 17.7 percent according to Halifax.

House prices in the month of March alone compared with a year ago were 17.6 percent down and the average price of a home came in at 157,326 pounds.

Prices have now fallen by 21 percent from their peak in August 2007 and analysts said further falls were to come.

"While there are one or two encouraging signs in the housing market, it has not turned yet - prices have further to fall," said Colin Ellis, an economist at Daiwa Securities.

Halifax said there were tentative signs that Britain's housing market was starting to stabilise, albeit at a very low level. But it also reckoned prices had further to fall this year.

"Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability," said Halifax chief economist Martin Ellis.

"We are seeing some signs of stability in market activity but from a very low base," he said.

Ellis said the plunge in house prices would help the market to find its floor eventually and lower mortgage rates would also help. However, those positive effects would be offset by the weak economic outlook and rising unemployment.