By Daniel Hunter

According to the Nationwide building society UK house prices rose by 0.2% in February compared with the previous month.

The building society said that the average UK home cost £162,638, based on its own mortgage data, signalling the lack of movement in prices in the last two years.

"For the second month in a row UK house prices remained flat in annual terms, maintaining the trend of broad stability that has been evident over the past two years," Robert Gardner, Nationwide's Chief Economist, said.

"While activity in the housing market remains subdued by historic standards, there have been tentative signs of a pick up in recent months. The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with encouraging signs of an improvement in credit availability.

"While the economic backdrop remains challenging, there are reasons for cautious optimism that activity will gather momentum in the months ahead. In particular, employment is rising at the fastest pace since the late 1990s which, if maintained, should help support demand for homes.

"However, progress is likely to be gradual, as stubbornly high inflation will continue to exert pressure on household budgets. Moreover, buyer confidence is likely to remain fragile until there are signs that the wider economic recovery is firmly entrenched."

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