LONDON - House prices rose faster than expected in October, data from mortgage lender Nationwide showed on Thursday, though a sustained recovery of the housing market still looks far from certain.
House prices in Britain were 0.6 percent higher than in September, Nationwide said, though they were still 0.9 percent lower than in October 2011.
Economists had expected a monthly rise of 0.2 percent after the 0.4 percent drop in September, and an annual decline of 1.2 percent.
"While the data on economic growth suggests that the UK economy has not been performing quite as poorly as feared, there is little doubt that it remains extremely fragile," said Nationwide's chief economist Robert Gardner.
"The situation is likely to remain challenging in the housing market," he said.
The Bank of England's new scheme to provide banks with cheap funds if they keep up lending to households and businesses should help to improve mortgage lending, he said.
"Nevertheless, housing market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment," he added.
Most economists expect house prices to stay unchanged or fall over the next 12 months in Britain, a Reuters poll showed in September.
(Reporting by Sven Egenter; editing by Ron Askew)