The rate of house price increase rose in the first five months of the year - from 8.5 to 5.9 per cent - compared to the same period last year, according to the latest figures from the Irish Permanent.

The index, compiled in association with the Economic and Social Research Institute, also shows that house prices rose by 1.8 per cent in May - on top of a similar rise in April.

Prices in Dublin increased by 3.7 per cent last month and, in the year to date, prices in the capital have risen by nearly 10 per cent. There was an increase of 21.3 per cent in Dublin in the last 12 months.

The rise in house prices in the rest of the State in May was 1.1 per cent with prices for the last 12 months rising by 19.2 per cent.

The average price paid by a first time buyer in May 2000 was £106,793 compared to £87,426 in May 1999, reflecting a 22.2 per cent rise. The corresponding increase for second-time buyers was 19.2 per cent.