Average home prices in England and Wales rose by 1.7% in July - the third monthly increase in a row and the biggest in five years, new figures show.

According to data from the Land Registry, the average value of a property stood at £155,885 during the month.

The annual rate of house price decline also fell to its lowest level since October 2008, down to 11.7% from 13.8% in June.

The number of homes sold rose for the fourth consecutive month to 42,699 in May, the latest month for which figures are available.

The group said although the figures were still considerably lower than those seen before the crisis and 34% below the sales volume from May last year, they had jumped 62% from the low reached in January this year.

Within the total, 242 homes were sold for more than £1 million during the month, well down on the 453 properties that changed hands for at least a seven-figure sum in May 2008.

The housing market has been showing signs of stabilising in recent months, with prices supported by a shortage of homes on the market as demand from potential buyers increases.

Earlier this week, Nationwide said prices rose for the fourth month in a row during August, increasing by 1.6%, while the annual rate of decline narrowed to just 2.7%.

The British Bankers' Association said the number of mortgages approved for house purchase had risen to a 17-month high during July as buyer interest reported earlier in the year translated into purchases.

But economists have warned that the market still faces considerable obstacles due to continuing problems in the mortgage market and rising unemployment.

Commentators have also said a sudden increase in the supply of homes for sale could trigger renewed price falls.

All regions of England and Wales saw price rises during July, with Wales seeing the biggest monthly gain of 3.1%, followed by the North East at 2.3%.

The smallest increase was reported in Yorkshire and the Humber at 0.9%, while prices rose by 1.2% and 1.4% in the South East and South West respectively.

On an annual basis, price falls are slowest in Wales at 8.3%, and greatest in the North East, with properties in the region losing 13.2% of their value during the year to the end of July.

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