Surprise increase reported for UK house prices

The rise pushed the average cost for a UK home back above the £150,000 figure - by £946. The society says the increase means the annual rate for house price falls reduced from 17.6 per cent to 15.7 per cent.

The news came with a warning. Nationwide's chief economist, Fionnuala Earley, says it is too soon to say figures had bottomed out.

She said: "The Bank of England has already taken strong measures to ease the tensions in economic and financial markets by cutting rates and commencing quantitative easing. However it will take time for these to work through into the housing market before we can expect a sustained recovery in house prices."

But the figures came just days after the Bank reported a 19 per cent increase in the number of mortgages approved for house purchases in February, albeit from a low base. The Royal Institution of Chartered Surveyors also reported that interest from potential buyers rose for the fourth consecutive month in February.

Nationwide's figures also show that house prices in Northern Ireland fell at an annual rate of 29.6 per cent during the first quarter of the year - the biggest fall for any UK region. Scotland has the smallest annual price falls at 12.6 per cent.