LONDON (Reuters) - House prices in England and Wales posted their biggest month-on-month gain in three years in March, driven by increases in London, a survey showed on Monday.
House prices rose 0.3 percent from February, the biggest increase since March 2010, according to a survey by Hometrack, a property analysis firm.
In year-on-year terms house prices were flat, the first time they have not fallen since September 2010.
Britain's housing market has been given a boost by the launch last year of the Funding for Lending Scheme under which the Bank of England provides banks with cheap funding to increase loans for homebuyers and businesses.
Last week, finance minister George Osborne announced further measures, including government guarantees for up to 130 billion pounds' worth of mortgages.
In London, prices jumped 0.7 percent in March from February and in the rest of England and Wales they rose in a fifth of postcode areas, the highest percentage for three years, according to Hometrack's survey.
Prices fell in only one region, the north east.
Driving up prices was a 19 percent increase in demand - as measured by the number of potential buyers registering with estate agents - in the past two months while the number of homes for sale rose 13 percent in the same period, Hometrack said.
Its survey is based on responses from estate agents and surveyors across England and Wales.
Other house price measures have shown signs of a recovery. Mortgage lender Halifax said earlier this month that in the three months to February, house prices were 1.9 percent higher than a year ago, the third successive increase in this measure.
Editing by William Schomberg/Ruth Pitchford