The Nationwide house price index showed that the cost of a home in the UK rose by 0.9% during last month, pushing average values back up above the £150,000 threshold to £150,946.

The surprise increase also led to a reduction in the annual rate at which house prices are falling, with this falling from a record 17.6% in February to 15.7% in March.

Fionnuala Earley, Nationwide's chief economist, said:
"While the rise in prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has been reached.

The Bank of England has already taken strong measures to ease the tensions in economic and financial markets by cutting rates and commencing quantitative easing. However it will take time for these to work through into the housing market before we can expect a sustained recovery in house prices."