UK house prices rose by 0.9 per cent in June, according to the latest survey from the Nationwide.

The building society said this was the third rise in the past four months, and shrank the annual rate of decline to just 9.3 per cent, from 11.3 per cent in May. The increase during the last month means the average home in the UK now costs £156,442 – £15,973 less than a year ago.

The Nationwide said the stabilisation of prices was a "welcome surprise".

"The price of a typical house rose by a seasonally adjusted 0.9 per cent in June, building upon the improving trend seen over the last several months," said Martin Gahbauer, Nationwide’s chief economist.

"At £156,442, the average house price across the UK is still 9.3 per cent lower than a year ago, but this marks the first time since July 2008 that the year-on-year fall has been in single digits. The three month on three month rate of change – a smoother indicator of the short-term price trend – turned positive for the first time since December 2007 to stand at 0.9 per cent, up from -0.4 per cent in May.

"If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole. This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008."

The Nationwide figures follow on the back of a recent HM Revenue & Customs report that completed house sales in the UK had risen again in May, to their highest level since last October.