House prices rebounded sharply in April, according to Nationwide, more than reversing a seasonally adjusted fall in March, although year-on-year house price inflation subsided further to seven per cent.
The building society said that without any seasonal adjustment the price of the average British house jumped by 1.5 per cent between March and April to £156,128.
Adjusted to take account of the usual springtime flurry of house-hunting activity, the increase was 0.9 per cent, the biggest one-month rise since last July. It follows a 0.6 per cent dip in March.
" Volatility in monthly house price changes is not unusual in the spring," said Nationwide's new group economist Fionnuala Earley.
"Given the early Easter, we believe that the traditional house-hunting season may have moved forward slightly this year. The trend, however, continues to confirm our view of a gentle slowing in the market."
Over the latest three months house prices have risen by an average of 0.3 per cent a month, compared with two per cent each month at the same stage last year, she added.
Nationwide believes that activity in the housing market has now stopped falling and expects to find that about 92,000 mortgages have been approved for house purchase this month.
That would be more than in recent months and about the level prevailing in 2000 - but well short of the peak of 132,000 mortgages a month reached at the end of 2003.
"Our view is that interest rates are now less likely to rise in the near future," Ms Earley added.
"If this is borne out, we expect that the housing market will continue on a broadly flat path with price growth cooling gradually throughout the year. A 0.25 per cent increase in rates would be unlikely to jeopardise this pattern, although its impact on expectations could lead to a slightly sharper path of deceleration throughout the summer."
The price of the average house has risen by 2.3 per cent so far this year, although seasonal adjustment reduces that to 1.2 per cent. Nationwide said estate agents had seen an increase in the number of unsold properties on their books with sellers reluctant to cut asking prices.
That echoes similar evidence from other housing market surveys and reports. The estate agency group Countrywide said on Wednesday that transactions were down between 25 and 30 per cent in the first quarter of this year from the same months in 2004.
The Department of Constitutional Affairs noted that mortgage lenders entered 25,869 repossession proceedings in county courts in England and Wales in the first quarter, more than 35 per cent up on the year ago and more than at any time since comparable records began in the mid-1990s.
Looking at the electoral implications of the house price boom since the 2001 General Election, Nationwide found that Liberal Democrat home owners have done best in cash terms, although Conservative constituencies have the highest house prices.
In Liberal Democrat territory, the average price of a home rose by £85,000, against £78,000 in both Conservative and Labour areas.