Figures released by the Nationwide building society showed a surprising jump of 1.3% in August, the biggest monthly rise since January 2010.

The rise brings the average price of a house in the UK to £164,729, only 0.7% less than a year ago, despite the recession and restrictions on mortgages.   

However, the Nationwide’s chief economist, Robert Gardner, warned that "we should never read too much into one month's data. Nevertheless, the fact that the annual pace of house price decline moderated to minus 0.7% in August from minus 2.6% the previous month provides evidence that conditions remain fairly stable.”