House price rise 0.5pc in May

House prices rose by 0.5 per cent in May, rebounding from a 2.3 per cent decline in April, but prices were still slightly lower on the year, figures from mortgage lender Halifax showed on Thursday.

The Halifax house price index showed house prices were 0.1 per cent down in the three months to May compared with a year ago. The figures were in line with analysts' forecasts and took the average price of a home to £160,941.

"Whilst there has been a modest improvement in the trend for house prices recently, the current average UK price is very similar to the levels both a year ago and at the beginning of this year. We expect this situation to continue with prices likely to still be around today's levels at the end of 2012 as the ongoing tough economic environment constrains housing demand," said Halifax economist Martin Ellis.

"Recent monthly house sales figures have clearly been affected by the ending of the stamp duty holiday for first-time buyers in late March. Overall, the trend for sales - like that for prices – appears to be one of broad stability," he added.