House prices rose across the UK by 1.6% in August according to the Nationwide.

At £160,224, the average price of a typical UK property is still slightly lower than a year ago, however the annual rate of change rose further in August, from -6.2% to -2.7%.

Martin Gahbauer, Nationwide's Chief Economist, believes lower interest rates have played a part in reversing the downward pressure on house prices.

-- Advertisement --

Mr Gahbauer said: "Even though house prices remain high relative to earnings, the fall in interest rates has improved the affordability of mortgages for those looking to buy a home. This helps to explain the strong rise in new buyer enquiries reported by estate agents for most of 2009. Although not all of these enquiries are turning into sales, house purchase transactions have continued to slowly increase from the record lows reached in late 2008."

(CD/GK)