HOUSE prices in Oxfordshire rose last month as the county continues to buck the national slowdown.

Official figures released by the Land Registry for March show the average price of a property in the county went up by 0.5 per cent to £254,590.

Oxfordshire remains in the top 15 hotspots of 109 counties and unitary authorities across the UK.

But nationally the annual rate of house price growth fell for the seventh month in a row, with a drop of 0.4 per cent to £184,798.

Experts say Oxfordshire's buoyancy in house prices is being caused by a combination of factors.

Gavin West, residential director at Oxford-based estate agents Kemp & Kemp, said: "We have had a significant drop in the supply of properties coming to the market caused by people worrying about prices.

"But we still have a back-up of demand in the system - most people don't understand the problems with the banking sector, they just can't find anything to buy and are chasing what is available."

Mr West added that major deals were still being done, particularly in the OX2 postcode covering North Oxford, Osney and Botley. Other factors such as the quality of schools, and major employers such as BMW, the universities and hospitals were also driving demand, giving Oxfordshire a "microclimate" on property prices.

Stewart Lilly, Harwell-based president of the National Association of Estate Agents, said that while some were predicting property prices would tumble as they did in the early 1990s, the economics were totally different now.

Then inflation was running at 15 per cent with high unemployment, while today inflation was low and in Oxfordshire there was almost full employment.

He said: "Providing people remain calm and start to think about their plastic debt, then they will be fine.

"Demand for housing is strong. Oxford, particulary within the ring road, has always fared extremely well with a strong investor market and money from overseas.

"In some areas prices have dropped a bit, but investors are snapping them up and the rental market is picking up."

The Land Registry figures showed London is the only region of England and Wales where annual house price inflation is still in double digits, at 10.5 per cent.

The South East shows the next strongest growth, 4.4 per cent.

The figures also showed that the number of homes changing hands was continuing to fall, with an average of just 81,926 transactions per month between October and January, 26 per cent fewer than during the same period a year earlier.

They painted a different picture to figures released by house-price information group Hometrack, which said the average house price in England and Wales had fallen for the seventh month in a row, leaving homes costing less than a year ago. But the Land Registry figures are thought more reliable as they are actual sales rather than a survey.