UK house prices rose by 1.2% during May as buyers continued to return to the market.
It is the second time in three months that house prices have risen, with the cost of property also increasing by 1% in March, while a fall of just 0.3% was recorded in April, according to Nationwide Building Society.
The latest jump pushed average prices up to £154,016, and caused the annual rate at which property values are falling to slow sharply from 15% to 11.3%.
But Nationwide warned it was too early to call an end to the house price correction, although it added that conditions in the market had improved during the past few months.
Nationwide said the recent improvement in prices was likely to have been caused by a shortage of homes on the market, due to a combination of lower building levels and sellers either delaying putting their home on the market, or opting to rent it out instead.
At the same time, estate agents have been reporting an influx of potential buyers as historically low interest rates and recent house price falls tempt people back into the market.
There has been a raft of positive data on the UK housing market in recent weeks, with both transaction levels and mortgage approvals for house purchase increasing.
But the UK's Council of Mortgage Lenders reported a 9% fall in mortgage advances during April, prompting economists to warn that any recovery was likely to be gradual.
