House prices increased by 0.4% in May, according to Halifax’s latest House Price Index.

House prices in the latest three months (March-May) were 1.5% higher than in the previous three months (December 2012-February 2013). This compared with the 1.3% rise recorded last month.

House prices have been rising modestly on this three month-on-three month measure since December 2012 with increases of between 1% and 2% in each of the past five months.

Prices in the three months to May were 2.6% higher than in the same three months a year earlier. This was the biggest increase since September 2010 (2.6%).

Martin Ellis, housing economist, said: “Market activity has also improved slightly in recent months although home sales remain low by historical standards.

“Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity.”