House prices are now up 4.7 per cent since the start of the year, after inching 0.2 per cent higher in July, but property transactions have slipped to their lowest level in two years, the Nationwide has reported.

The building society said that the average house price rose to £168,731 in the month, up 0.2 per cent from June, but 0.4 per cent lower than this point last year. The average price is up more than £7,000 on January's figure of £161,211 - a rise of 4.7 per cent.

But despite an uplift in mortgage approvals in June, according to the Bank of England, Nationwide's chief economist Robert Gardner said market activity remained stuck at a very low level.

Just 204,000 property transactions were recorded in the three months to June - the lowest level for what are typically strong home buying months since the market was in the depths of the recent slump two years ago. At that point house prices were falling by 16% annually on the Nationwide index.

The small monthly rise in house prices in July improves the year-on-year figure from last month, when prices were 1.1 per cent lower than a year ago.

The listless property market has seen transactions stuck at low levels and while the Bank of England reported today that mortgage approvals for house purchase rose to a 13-month high of 48,421, in June, this remains only just over half the long-term average of 90,000 seen since 1993.

Read more about what Nationwide is predicting over the coming months at: http://www.thisismoney.co.uk