House prices recorded a modest rise in May according to a lender’s index, echoing results from a similar survey last week.

The Halifax House Price index showed a 0.5 per cent rise in May from April, broadly in line with a reading from the Nationwide House Price index showing a 0.3 per cent rise for the month.

Martin Ellis, chief economist at Halifax, noted that despite the recent rise, prices are almost the same as a year ago and at the start of this year. “We expect this situation to continue with prices likely to still be around today’s levels at the end of 2012, as the tough economic environment constrains housing demand,” he said.

At £160,941, the average price of a UK house, was 0.7 per cent higher than in December 2011. However, Mr Ellis acknowledged that the limited number of transactions and the slowdown in the number of properties for sale may be propping up prices to some extent.

Chris Crowe, economist at Barclays Capital, noted that following the expiry of a tax break for first time buyers who purchased lower priced homes, activity has fallen to levels not seen since the first three months of 2010.

“As a result, we expect prices to remain subdued in the near term, although we expect to see some support to prices from continued weak supply,” he said.