Home prices in the UK have seen an upturn for the first time in nine months in February on increased demand for houses in London and southern England, according to Hometrack.

The property analytics business said that home prices edged up 0.1 percent in England and Wales from the previous month, as the number of new buyers registering with real estate agents increased by 14.3 percent over the same period. Meanwhile, supply of houses increased by just 8.7 percent.

On a year-over-year basis, house prices declined by 0.1 percent.

"The impetus for improved market conditions and higher prices has been driven by London and the home counties of southern England, where there is the greatest mismatch between supply and demand," said Richard Donnell, director of research at Hometrack.

"We expect demand for housing to continue to grow as we move into spring."

In London, home prices rose by 0.3 percent with new-buyer registrations in the capital increasing by 18.5 percent.

Despite the higher inflation rate that squeezes household finances, the housing sector in the country has been helped by the Bank of England's Funding for Lending Scheme (FLS). Launched in August 2012, the scheme provides cheap funds to banks and building societies, which they can lend to customers at lower interest rates.

FLS has boosted credit availability and mortgage activity in the country has started rebounding.

On 1 March, building society Nationwide said that UK house prices increased by 0.2 percent month-over-month in February as demand for homes is supported by rising employment rates.

Nationwide added that there are reasons for "cautious optimism" for improved housing activity in the months ahead.

Nevertheless, a gauge on manufacturing activity in the country compiled by Markit Economics showed that the activity contracted unexpectedly in February as new orders declined significantly. The lower index reading indicates that the strength of the ongoing recovery in the UK economy remains uncertain.

The Bank of England separately said the same day that mortgage approvals declined unexpectedly in January.