House prices are on the rise according to the latest Permanent TSB house price index, with first-time buyers to the fore. The index rose 1.8 per cent in March, the fastest rate of growth in 15 months.

The figure compares with a rise of 0.7 per cent in February and 1.3 per cent in March last year. On an annualised basis, the cost of homes climbed 3.2 per cent, up from 2.6 per cent last month.

First-time buyers bore the brunt of the increase, with prices rising 2.5 per cent over the course of the month, compared with 1.3 per cent for second-time buyers. This reversed the situation in February when prices were static for first-time buyers and rising for existing home owners. The average price paid in March by first-time homeowners was €163,626, against €206,644 for second-time buyers.

However, the price of new houses (up 0.4 per cent) lagged that of existing property (up 2.5 per cent).

Prices outside Dublin rose more than twice as fast than those in Dublin over the month - 2.2 per cent against 1 per cent - matching the situation in February, reflecting the widening commuter belt around Dublin as househunters look further afield for affordable homes.

The average price of a house in Dublin was €236,954 compared with €163,474 elsewhere. The rise in Dublin was skewed towards the less-expensive end of the market.

Commenting on the figures, Permanent TSB head of marketing Mr Niall O'Grady said: "Clearly, prices are strengthening on the back of last December's budget and the continuing benign outlook for interest rates. We expect further increases in the months ahead."

Permanent TSB accounts for more than one in every four mortgages sold in the Republic. The index is compiled in association with the Economic and Social Research Institute.