UK house prices rise unexpectedly in June but annual rate falls

Nationwide says mortgage crisis likely to exert significant drag' on market activity in coming months

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UK house prices have defied expectations by growing slightly in June but annual prices fell at the fastest rate since 2009 as soaring mortgage costs took a toll on the market, according to Nationwide building society.

The surprise monthly rise of 0.1% reversed a 0.1% fall in May and confounded economist forecasts of a 0.3% fall. It pushed the average cost of a house in the UK up slightly to 262,239.