Britain's housing market is showing signs of green shoots as home prices increased 0.8 per cent in August after gaining 1.2 per cent in July.

Data compiled by the home-loans provider Halifax revealed that the average price of a house soared to 160,973 pounds in August.

However, home prices were still 10.1 per cent lower as compared with figures from previous year.

According to Halifax' analyst Martin Ellis, the rise in house prices was the result of low interest rates along with shortage of houses.

The Bank of England was widely expected to keep its key lending rate at a record low of 0.5 per cent.

But economists have warned that rising rate of unemployment might drag the home prices down again.