House prices in Britain rose by 1.6 percent in August, slowing the annual fall in prices as low interest rates helped support the market, a major mortgage lender said Thursday.
The Nationwide Building Society, the nation's No. 3 mortgage lender, said that August's gain left the average house price 2.7 percent lower than a year ago.
That was a substantial improvement on July, when prices rose 1.4 percent to put the annual price drop at 6.2 percent.
However, Nationwide warned that interest rates would not remain at the current record low of 0.5 percent indefinitely as inflationary pressures begin to revive along with economic growth.
The building society said that subsequent rising interest rates would probably have the effect of releasing additional supply back onto the market and dampening the recent rise in buyer interest.
"Under such conditions, the strong price increases of recent months would become difficult to sustain," it said, while noting that a rise in interest rates "is probably still some way off."