BULLISH estate agents believe the Westcountry housing market is in the throes of a sustained recovery after the average cost of a home rose £14,000 in the past year.

The 1.1 per cent rise during March means a typical home is valued at £168,521, according to Halifax, and represents a rebound in the market after prices suffered their first fall in eight months in February.

The data reveals an annual rise of 5.2 per cent, pointing towards a strengthening in the housing market. Agents now believe the market in Devon and Cornwall is in "slow but steady" recovery mode after the credit crunch and recession saw prices fall by about 20 per cent from their peak three years ago.

Richard Copus, Devon spokesman for the National Association of Estate Agents, said: "There is a positive mood we have not seen for two years."

The Halifax report does not focus the Westcountry specifically, but last month's Land Registry data, widely viewed as the most accurate barometer of the housing market, suggested prices in the region are heading upwards.

The Land Registry survey showed that in the previous 12 months, prices rose in Devon by 5.4 per cent to £191,659, in Plymouth by 5 per cent to £129,476, in Torbay by 3.5 per cent to £153,272 and in Cornwall by 3.2 per cent to £187,755.

Mr Copus said the Land Registry figures – which stated prices rose by under 1 per cent in all four local authority areas in Devon and Cornwall in February – were a good guide to the "slow recovery mode".

He added: "Down here, we have been steady for seven, eight months. Prices have gone up by about 1 per cent in the past four or five months.

"If you look at the Land Registry figures – which are based on historic sales about five months before – you will see rises have been pretty steady.

"Houses that are overpriced are not moving. What is interesting is that the General Election does not seem to be affecting the market. We have been busy in the past few weeks."

Robin Thomas, partner in charge of Strutt & Parker's Exeter office, which sells middle-and top-end homes across the region, said that in the past three weeks, the firm had sold properties between £400,000 and £2.5 million.

The market was buoyed by buyers from London and the South East renewing interest in the region as a result of international buyers flooding the capital and return of City bonuses.

Mr Thomas reckoned prices fell between 20 and 25 per cent since the peak in June 2007, but had recovered by 5 per cent in the last nine months. "The market is probably 15 per cent off the peak. The really good ones are not far off the peak of 2007."

Uncertainty over the General Election result meant sellers were holding off hoisting the for sale signs, meaning the "market is one of shortage of supply and keen demand".

"We have agreed a lot of sales in the past few weeks and there has been competition for them – that's not something we've had in the last year."

Halifax said prices fell 1.6 per cent in February as bleak winter weather at the beginning of the year and the return of a lower £125,000 stamp duty threshold dampened demand.

But Britain's biggest mortgage lender also warned there were signs that the rate of house price increases could be slowing. Taken together, the first three months of the year were 0.6 per cent higher than the last quarter of 2009, well below the previous 3.6 per cent quarterly increase.

Halifax housing economist Martin Ellis said: "There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand.

"This should help to contain the upward pressure on house prices."

Figures from the Bank of England last month showed that the number of mortgages approved for house purchase dropped for the third consecutive month during February to a nine-month low, suggesting activity in the housing market continues to be subdued. Halifax also said prices were 9.1 per cent above their lowest point in April last year.