UK house prices in August took their biggest one month leap in nearly three years, prompting some economists to argue that a rebound in growth will be stronger than expected.

The closely watched Nationwide house price index recorded a 1.6% rise in August, the largest increase since November 2006. The three month-on-three-month change – considered a smoother indicator of price movement – was 3.3%, up from 2.7% in July. This was the steepest rise since February 2007.

Mike Saunders, economist at Citi, said: 'This follows other signs that the housing market is rebounding quickly – much more quickly than we and others had expected – from the extremely weak conditions of late 2008 and early 2009.'

Financial Times, The Times