By Daniel Hunter

Building society Nationwide have reported what they call a 'surprising' rise in house prices for August.

The 1.3% rise was the biggest monthly rise since January 2010, and left the average UK house price at £164,729.

Despite the economy still suffering the rise means that prices are only 0.7% lower than a year ago, although Robert Gardner, Nationwide's Chief Economist, warned that we should not get too carried away.

“UK house prices rose by 1.3% in August, the largest monthly increase since January 2010, reversing the declines recorded in the previous two months," Robert Gardner, Nationwide's Chief Economist, said.

"Given the difficult economic backdrop, the extent of the rebound in August is a little surprising. However, we should never read too much into one month’s data, especially since monthly price changes have been impacted by a number of one-off factors this year, such as the ending of the stamp duty holiday for first time buyers. These are factors that cannot be controlled by the usual process of seasonal adjustment.

“Nevertheless, the fact that the annual pace of house price decline moderated to -0.7% in August from -2.6% the previous month provides evidence that conditions remain fairly stable. This may be explained by the surprising resilience evident in the UK labour market, with further increases in employment in recent months, even though the UK economy has remained in recession.”

Join us on
Follow @freshbusiness