House prices increased by 1.2 percent during May according to the latest figures from Nationwide.
The average house in the UK cost £154,106 in May - 1.2 percent higher than in April, Nationwide has revealed.
This marks the second month in three that Nationwide has reported an increase in the average property value. Over this three-month period prices fell overall by 0.5 percent - the smallest quarterly drop since the start of 2008. Additionally, the annual rate of price decline was reduced from 15 percent in April to 11.3 percent in May.
However, Nationwide suggested that the improvement was down to the small number of new properties on the market and warned that continued economic pressures meant that the overall trend would still be toward a decline. Official government figures have shown that the UK is facing its worst recession in decades, while analysts including those at the Bank of England do not expect a recovery in the real economy before 2010.
"During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods," said Nationwide's chief economist Martin Gahbauer. "In the current downturn, the combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet."
The lack of properties for sale has led to a new group of property owners, labelled 'accidental landlords', who are keen to sell but want to wait until house prices have begun to rise. This group tend to buy a new property and rent out the old property that would normally have been sold.
