Nationwide reported that UK house prices rose by 0.9% month on month in October, confounding predictions of a 0.4% fall.
The average price of a property sold last month rose to £259,423, up from £257,808, according to figures from the lender.
That still means house prices are down 3.3% compared to October 2022, a smaller annual fall than the 5.3% recorded in September.
Despite the increase, Robert Gardner, Nationwide’s chief economist, warned that housing market activity has remained “extremely weak”.
He pointed out just 43,300 mortgages were approved for house purchase in September, around 30% below the monthly average prevailing in 2019.
“Activity and house prices are likely to remain subdued in the coming quarters. Despite signs that cost-of-living pressures are easing, with the rate of inflation now running below the rate of average earnings growth, consumer confidence remains weak and surveyors continue to report subdued levels of new buyer enquiries.”
He felt the “uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained”.