Nationwide’s House Price Index recorded a rise in prices for the sixth consecutive month, with
annual house price inflation turning positive for the first time since March 2008, at 2%.

The Bank of England statistics showed that house purchase approvals rose to 56,215 in September, the highest level for 18 months.

The value of mortgage approvals by building societies also rose by £300m to £1.57bn in September, according to the Building Societies Association.

Brian Murphy, head of lending at Mortgage Advice Bureau, said it was encouraging that lending had recovered, but he attributed the rise to the end of the summer housing market lull.

He added: “Buyers and sellers are returning to the market. However, there is still a shortage of properties in certain areas leading to a lack of choice. The lack of funding will remain a
further constraint on lending.”

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David Hollingworth, head of  communications at London & Country, said the figures showed
lenders seemed keener to do business before the end of 2009.

He added: “There has been a hint of competition in the market as lenders reduce rates and show more appetite to lend. However, any recovery remains fragile.”