House prices rose in October at their fastest pace in 15 months, the Nationwide Building Society said yesterday, in another sign the property market is stabilising after a sharp slowdown in the last year.

The mortgage lender said prices rose 1.3 percent last month, bringing the annual rate of gain up for the first time this year to 3.3 percent from a 9-year low of 1.8 percent in September as the Bank of England?s August rate cut boosted confidence.

?These data provide some evidence that firmer housing activity may be starting to bolster prices,? said Ian Stewart, economist at Merrill Lynch. ?All negative for hopes of rate cuts.?

Interest rate futures sold off sharply after the figures were released but soon recovered ground as many analysts suspect slow growth will still prompt the BoE to cut borrowing costs from their current 4.5 percent again in the new year.

Other indicators have also pointed to the housing market slowdown abating after the Bank of England (BoE) cut rates in August and ended a trend of rising borrowing costs that started in late 2003. BoE data published on Monday showed mortgage approvals rose to their highest level in over a year in September, while mortgage lending growth has also picked up.