House prices saw their biggest year-on-year growth in more than two years during February, Halifax reported today.

At 163,600 on average, prices were 1.9% higher than a year earlier. The lender says it expects to see a national increase in house prices over the course of 2013.

The annual increase was the highest recorded since September 2010, and prices were also up by 0.5% on a month-on-month basis.

Halifax adds that prices in the three months to February were also 1.9% higher than in the previous quarter. This is the third time in a row that prices have risen on this measure of the underlying trend.

The study says quarterly figures give the clearest indication of what is happening in the market as they smooth out monthly volatility.

More mortgages available

Various studies have reported improvements to the housing market since the Government's Funding for Lending scheme, which helps borrowers by giving lenders access to cheap finance, was launched last August.

The number of mortgages on the market has increased by around one third since the scheme was launched and lenders are also offering some of their cheapest ever mortgage rates.

Halifax also points to HM Revenue and Customs figures which show that house sales have been steadily lifting in recent months. There were 82,320 sales in January this year, marking the seventh monthly increase in sales.

Martin Ellis, housing economist at Halifax, says: "We expect to see a national increase in house prices over the course of 2013. Weak income growth and continuing below-trend economic growth, however, are likely to remain significant constraints on housing demand."

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