Despite the recent interest rate rises, house prices are still increasing at a steady rate as people continue to make a saving and investment in property, according to the country’s largest mortgage lender, Halifax.

The bank reported that prices rose by 1% in March, with the average house price now standing at £194,362. A buoyant economy and a shortage of property on the market were the main factors keeping prices strong.

However, Halifax noted that there are signs the pressure of three interest rate rises since August are beginning to pinch householders’ budgets and are suppressing some of the exuberance of the market.

“We expect the recent rises in interest rates, negative real earnings growth and above-inflation council tax demands to lead to slower house price growth over the coming months,” said Halifax group economist Tim Crawford.

House prices increased in all regions of the UK in the first three months of the year, said Halifax, with Scotland showing the biggest rise by a considerable margin at 5.4% and Wales following behind with a robust 4.9%.

The slowest areas were the East Midlands and Yorkshire, which edged up marginally at 0.2% and 0.6% respectively.

The figures also showed that the average price of a house in Northern Ireland has broken the £200,000 barrier for the first time.