LONDON, May 7 Reuters British house prices edged 0.1 higher in April to stand 1.1 up on a year earlier, figures from mortgage lender Halifax showed on Tuesday, a slight pickup from March39;s 0.4 annual growth as interest rates remain high.

Tuesday39;s data marks a return to monthly growth after prices fell 0.9 in March the first decline since September and comes after rival mortgage lender Nationwide reported an unexpected 0.4 April price drop last week.

The reality is that average house prices have largely plateaued in the early part of 2024, Halifax39;s head of mortgages, Amanda Bryden, said.

Economists polled by Reuters expect the Bank of England to keep interest rates at a 16year high of 5.25 when it announces its May rate decision on Thursday, and financial markets think rates are unlikely to fall before August.

BoE mortgage approvals data which sometimes acts as a leading indicator for prices hit an 18month high in March, up 20 on the year, as activity recovered from the knock received after former Prime Minister Liz Truss39; budget plans shook lending markets in late 2022.

Firsttime buyers in particular are compensating for higher borrowing costs by targeting smaller properties, Bryden said. Affordability constraints are still a significant challenge.

British house prices rose by 25 between February 2020 and September 2022 similar to big prices rises seen in many other Western countries during the COVID19 pandemic and in February were 3 below their…