UK house prices increased by 1.2% in May, according to a report by Nationwide.

However, the average price of a house is still 11.3% lower than last year (£154,016), although this marks a significant improvement from the annual decline of 15.0% recorded in April.

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: "Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively. "During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods. In the current downturn, the combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet.

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"Nonetheless, the improvement in house price trends is consistent with signs of stabilisation in several other economic indicators and suggests that any further price declines may occur at a less rapid pace than in 2008."

(CD/JM)