House prices rose 19.8 per cent in February from a year earlier, easing back from 20.6 per cent in January, according to the latest house price index from Irish Life & Permanent.

Over the month, prices rose by 0.4 per cent, the lowest monthly growth rate since January 1999.

House prices rose more quickly in Dublin, which recorded a rise of 1.3 per cent in February compared with a 1 per cent rise in January. Outside Dublin prices remained completely flat compared with a 1.1 per cent increase in January.

The average price paid by the first-time buyers in February was £122,050 (P155,083) compared to £100,031 in February 2000.

In both January and February, Dublin prices rose by 2.3 per cent, while the rate of increase for the rest of the Republic was 1.1 per cent.

The prices are based on Irish Permanent loans, which account for about 20 per cent of all loans in the State, while the index is compiled in conjunction with the Economic and Social Research Institute.

In February, prices rose by 0.7 per cent for first-time buyers and by 0.3 per cent for second time buyers. This contrasts with January, when first-time buyers saw an increase of 0.4 per cent while second timers faced increases of 1.7 per cent.

Nationally, new houses rose by 0.8 per cent compared to 0.2 per cent for existing houses. That difference is likely to widen in coming months as investors move back into the new homes market as a result of cuts in stamp duty announced recently by the Minister for Finance.