UK house prices have now recovered to the same level as a year ago, according to the latest figures from the Nationwide. The average price of a home last month rose by 0.9% to £161,816, almost identical to September 2008. The building society said house prices had now risen for five months in a row. However, the nation's homeowners continued to pay off more of their mortgages between April and June, according to the Bank of England.  A further £7bn was added to people's equity in the country's housing stock, as homeowners accelerated the repayment of their home loans, or put down bigger deposits when taking out a new mortgage.  

An extra £29bn has now been added to the value of their stake in the UK's housing wealth since the summer of 2008, a process triggered by last year's sudden slump in house prices.

A further injection of equity has partly reversed the previous trend, which saw home owners cashing in on the rising value of their properties by expanding their mortgages to finance other spending. More than £300bn was borrowed this way between the start of the decade and early 2008.

The Nationwide warned that the recent house price increases were unlikely to continue at their present rate, especially if more properties come on to the market, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months.