The housing boom showed no signs of cooling down on Friday, as new data showed April saw the biggest monthly rise in average UK house prices since February 2004.
Nationwide said annual house price growth rebounded to 7.1% in April, from 5.7% in March. The average price this month stood at £238,831, up 2.1% from March.
Prices are now up £15,916 over the past 12 months.
The mortgage provider’s data covers the month after Chancellor Rishi Sunak’s Budget delivered a package of measures to support buyers, from a stamp duty holiday extension, to a new mortgage guarantee scheme to help people with a 5% deposit get on the property ladder.
Demand for properties has also been boosted by people reassessing housing needs during lockdowns.
Robert Gardner, Nationwide's chief economist, said: “Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.”
He added: “With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year. Indeed, if house prices remain flat in month-on-month terms over the next two months, the annual rate of growth will reach double digits in June.”
However, he cautioned that further ahead, the outlook for the market is far more uncertain.
Gardner said: “If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Broader rollout of the vaccine and easing of lockdown restrictions is increasing confidence in the economy. This economic recovery is giving an additional boost to housing market activity rather than the housing market supporting the economy, which was the case when the pandemic first struck.”