UK house prices returned to growth in May amid signs of market “resilience” after two months of falls, according to a building society.

The average property price in Britain rose 0.4% month on month to £264,249, after a similar-sized fall of 0.4% in April, Nationwide said.

Robert Gardner, Nationwide’s chief economist, said: “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer-term interest rates in recent months.”

The annual rate of growth more than doubled to 1.3% in May, from 0.6% in April.

It comes after slight increases in mortgage rates since the start of the year slowed the housing market through March and April.

According to Moneyfacts, at the end of January the average two-year fixed-rate mortgage cost 5.56%, rising to 5.92% by the end of May.

Monthly data released on Friday by the Bank of England showed that activity in the housing market held steady in April, with 61,100 new mortgages approved by lenders, a figure little changed from the March tally.

However, the number of people who remortgaged decreased from 33,500 to 29,900 over the same period, it said.

The Bank data showed that mortgage borrowing rose in April by a net £2.4bn, compared with a net increase of £500m in March. The April figure was 0.2% higher than a year before, in the first positive reading since October 2022.

The “effective” interest rate – the rate actually paid on newly drawn mortgages – was only marginally higher in April than it had been in March, at 4.74%, according to the data.

Experts think the Bank is likely to cut interest rates in August or September on the back of cooling inflation. The headline rate eased to 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March.

Gardner added: “Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”

This week a separate index, by the property website Zoopla, showed that Britain’s supply of homes for sale was at its highest point in eight years, in a trend that experts said would limit house price rises for the rest of 2024.

Meanwhile, Nationwide research suggested the general election was unlikely to have a significant impact on house prices. Previous polls have not affected underlying market trends, the research showed, as buyers sought to continue with sales regardless of events in Westminster.

Andrew Wishart, an analyst at the consultancy Capital Economics, said that despite the small headline increase recorded by the Nationwide index, the “big picture” was that mortgage rates creeping higher in recent months had caused house prices to “stagnate”.

“Taking a step back, house prices have been flat for a year and a half, with the slight increase in May leaving them in line with their January 2023 level,” he said.