House Prices Rise In UK Again: Nationwide

For the second month in a row, British house prices have edged up amid "tentative signs" of recovery, Nationwide said.

The price of a typical home rose by 0.2% month-on-month in February, according to Nationwide's survey, following a surprise rise in January when prices increased by 0.5%.

But in both cases, house prices remained flat when compared to the same month a year earlier, underlining the market's ongoing stability.

The cost of an average home rose to £162,638 - from £162,245 in January, the building society said.

Nationwide's chief economist, Robert Gardner, said the Government's Funding for Lending Scheme - which encourages banks and building societies to maintain or increase lending levels - had increased mortgage availability.

"While activity in the housing market remains subdued by historic standards, there have been tentative signs of a pick up in recent months," he said.

"The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with encouraging signs of an improvement in credit availability."

Since the scheme was launched in August, the number of mortgages on the market has increased by around one third.

Mr Gardner added that there were reasons for "cautious optimism" that activity would pick up despite the UK's tough economic conditions.

Employment levels - which are rising at their fastest pace since the late 1990s - should also help support demand for homes, he said.

"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."

The figures come a day after the National Association of Estate Agents said the number of hopeful home-buyers registering with agents reached its highest level in more than five years.

It also reported that sales to first-time buyers were showing a strong increase.