On a monthly basis prices climbed 0.6%, following a 0.9% fall in June, pushing the average UK non-seasonally adjusted house price to £272,664.

The modest uptick in prices comes amid signs of stabilising market activity. Mortgage approvals for house purchases totalled 64,200 in June, roughly in line with pre-pandemic norms, despite much higher interest rates.

Nationwide chief economist Robert Gardner said the housing market is benefiting from improved affordability and steady income growth. “While the price of a typical UK home is around 5.75 times average earnings, this is the lowest ratio seen in over a decade and well below the record high of 6.9 in 2022,” he said.

Falling mortgage rates have also eased affordability pressures. A typical five-year fixed rate for borrowers with a 25% deposit now sits around 4.3%.

This is well below the peak of 5.7% recorded in late 2023, though still significantly above the sub-1.5% rates seen in 2021.

Gardner added: “Deposit constraints are easing, helped by improving availability of higher loan-to-value mortgages. Meanwhile, strong household balance sheets, low unemployment, and real earnings growth continue to support housing demand.”

He expects housing activity to strengthen further in the coming quarters, provided the wider economic recovery holds and the Bank of England continues to lower interest rates as anticipated.

Tom Bill, head of UK residential research at Knight Frank, said: “The housing market is getting back on its feet after a slowdown in the second quarter of the year due to the stamp duty cliff edge in April and a general mood of economic uncertainty.

“Despite a modest uptick in July, high levels of supply are keeping a lid on prices and means it is still very much a buyers’ market.”

But some experts said Nationwide’s findings did not reflect the reality in all parts of the country.

Jonathan Hopper, chief executive of Garrington Property Finders, said: “The balance between supply and demand is tipping further in favour of buyers.

“Despite the modest increase in Nationwide’s national rate of price inflation, in many areas prices are either flat or falling – there are simply too many sellers and not enough serious buyers.”

Earlier this week, the Wales House Price Index also reported a rise in prices.