<a href="/house-prices">House prices</a> rose 1.2 per cent in June, their biggest month-on-month rise since October, mortgage lender Halifax said.
That confounded analysts' expectations for an unchanged reading and left prices 3.5 per cent lower in the three months to June compared with a year ago.
"Low interest rates, an increase in the number of people in employment and some tightening in market conditions earlier in the year are likely to have been the main factors behind the recent improvement in price trends," said Halifax housing economist Martin Ellis.
"A slowly improving economy and sustained low interest rates should help to support broad stability in the market over the coming months," he said.
"The market is, however, likely to continue to face significant headwinds which are expected to constrain housing demand. Low earnings growth, higher taxes and relatively high inflation are all continuing to put pressure on household finances."
City A.M. Reporter