Annual rate of decline eased from 15% in April to 11.3% in May according to Nationwide

House prices rose 1.2% in May according to the latest data from Nationwide building society.

The survey also found the annual rate of decline eased from 15% in April to 11.3% in May and the average price rose from £151,861 in April to £154,016 this month.

Martin Gahbauer, chief economist at Nationwide, said the rise may be explained by a shortage of stock as vendors remain cautious about selling into a falling market.

He said: “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. 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.”

Liberum Capital analyst Charlie Campbell added: “The figures were surprisingly good and I am surprised the spring rally has continued into May but June and July will be the months to watch. The real test will come when people who have lost their jobs put property on the market and supply picks up.”