The report stated that house prices are resilient in face of economic uncertainty, and that the rise reverses the previous months fall.
It also said that the market is continuing on its broadly flat but softening trend.
The annual rate of house price inflation at its lowest since May 1996, and house prices are rising more slowly than wages for the first time in nine years.
Commenting on the figures Fionnuala Earley, Nationwide's group economist, said: “House prices bounced back in July, increasing by 0.2 per cent and reversing the fall in June. However, the overall picture remains one of a gently softening market. The annual rate of house price inflation fell to 2.6 per cent in July - its lowest rate since May 1996. This compares with a rate of 4.1per cent last month and more than 20 per cent this time last year. The price of a typical house in the UK is now £158,348."
