Martin Ellis, Halifax housing economist, said:

“These steady market conditions have helped to stabilise house prices in 2011 following last year’s modest decline.”

Ellis said he expects this pattern to continue “with little genuine direction in either house prices or sales.”

Sustained low interest rates and a slowly improving economy should help to support demand still under pressure from weak earnings growth, relatively high inflation and higher taxes, he said.

The average UK house price in July was marginally higher at 0.7% than in December 2010 on a seasonally adjusted basis, at £163,981.

The number of mortgages approved to finance house purchase – a leading indicator of completed house sales – increased by 4% between May and June to 48,421; the highest monthly total since May 2010.

The industry-wide number of approvals remains within the range of 45,000- 50,000 a month where it has been since the beginning of 2010.

Nicholas Ayre, spokesperson for UK buying agents, Home Fusion, said:

“Until people are genuinely confident about the economy and their own financial security, the property market will remain very much on the back foot. Unfortunately, confidence and a sense of security are in extremely short supply.

“There has been much talk about the UK’s property market ambling along with very little direction but this could rapidly come to an end as the global economy goes pop.”

He added one of major issues with any house price analysis is that the data doesn’t reflect what’s happening on the ground because there is very little activity and very few sales taking place.