House prices jumped a "surprising" 1.3% in August, the Nationwide building society has said. It was the biggest monthly rise since January 2010 and left the average UK house price at £164,729.

It means prices are only 0.7% lower than a year ago, despite the recession and continued mortgage rationing.

However, the society's chief economist, Robert Gardner, warned that "we should never read too much into one month's data".

"Nevertheless, the fact that the annual pace of house price decline moderated to minus 0.7% in August from minus 2.6% the previous month provides evidence that conditions remain fairly stable.

"This may be explained by the surprising resilience evident in the UK labour market, with further increases in employment in recent months, even though the UK economy has remained in recession," he added.

Russell Quirk, of estate agents eMoov.co.uk, said: "Read nothing more into August's 1.3% rise than low transaction levels.

"Prices are jumping around from one month to the next and September could just as likely see a reverse."