House prices rose by 1.3% in August, the largest monthly increase since January 2010, according to data released by Nationwide.
This compares to a change of -0.8% recorded in July and brought the average house price (not seasonally adjusted) to £164,729.
Robert Gardner, chief economist at Nationwide's: "Given the difficult economic backdrop, the extent of the rebound in August is a little surprising.
"However, we should never read too much into one month's data, especially since monthly price changes have been impacted by a number of one-off factors this year, such as the ending of the stamp duty holiday for first time buyers.
"These are factors that cannot be controlled by the usual process of seasonal adjustment."
The upturn meant the annual pace of house price decline rose to -0.7%, compared to -2.6% last month, with Nationwide attributing the stabilisation to the "surprising resilience" of the labour market and increases in employment in recent months.
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