House prices rose by 0.3% in May, but are still 0.7% lower than one year ago, the latest house price index from Nationwide shows.
A typical home is now valued at £166,022.
Robert Gardner, chief economist at Nationwide, says the fact that house prices had a modest increase in May demonstrates that they are holding up well against a flagging economy.
He says: “Even though the UK economy dipped back into recession in Q1, and showed few signs of a significant pickup in economic activity at the start of Q2, house prices were still up 0.3% in May.
“Demand for homes remains subdued on the back of weak labour market conditions, but the lack of homes coming on to the market is providing support for prices.”
He adds: “This is in part a reflection of the low rate of building in recent years which has failed to keep pace with household formation.”