House prices in the Republic rose by 9.9 per cent in the three months to the end of June, according to the latest figures from First Active. The mortgage lender last night stood by its figures which appear increasingly at odds with those produced by other lenders and estate agents.

The Irish Permanent index of house prices, published last month, recorded a rise of only 5.7 per cent in the same period. The difference between the two indices was even more marked in the first quarter of the year when First Active said house prices fell by 0.5 per cent and Irish Permanent claimed they had risen by 4.7 per cent. Both lenders base their figures on their own lending, which is 16 per cent of the market in the case First Active and in the early twenties for its larger competitor.

The big gains in the First Active index in the last three months mean that both lenders are now giving similar figures for the rise in prices in the six months to the end of June. House prices rose 9.4 per cent in the period according to First Active and 10.4 per cent according to Irish Permanent. Prices in Dublin and its surrounding region rose 10.8 per cent in the second quarter but are up only 6.2 per cent in the first six months as a whole. Mr Richard Hoare, the operations director for First Active, said yesterday that the lender's figures were still meaningful, although he acknowledged its recent figures were "volatile". He said that the most important measure was the year-on-year increase. Prices were up 14.1 per cent between June 1999 and June 2000, which is more than two and a half times the rate of inflation, he said.

There is some evidence, however, that the rate of increase is slowing, according to First Active. House prices rose by 31.3 per cent in the previous 12-month period, from June 1998 to June 1999.

"Demand will continue to outstrip supply for the foreseeable future despite recent measures," he said.