According to Nationwide Building Society, the consensus estimate had been for a rise of 0.1%.

Robert Gardner, Chief Economist at Nationwide, said: “The annual pace of change continues to display a picture of relative stability.

“Housing-market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment.”

Despite the positive news, the lender has said that the values have yet to settle in the upward trend and is treating the news with caution.

“With households and the public sector focused on repairing their finances rather than spending, the economic recovery is likely to remain fairly sluggish.

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Gardner also points to the Bank of England’s Funding for Lending Scheme as a positive for the mortgage market.