House prices surged by 8.8% year-on-year in January as they continued to increase at their fastest pace since 2010, a building society has reported.
Prices lifted by 0.7% month-on-month to reach £176,491 on average in the UK, marking the 13th monthly rise in a row as consumer confidence grows, the Nationwide said.
The 8.8% annual increase is the biggest jump since May 2010 and follows an 8.4% year-on-year uplift in December, although Nationwide said prices are still about 4% below their 2007 peak.
Robert Gardner, Nationwide’s chief economist, said: “The housing market is continuing to gather momentum on the back of further solid gains in employment, record low mortgage rates and rising confidence.”
He said there have been encouraging signs that housing market activity was returning towards more normal levels, with recent HM Revenue and Customs figures showing that the number of house sales in December increased to 103,000, which is up by almost a third (30%) on the same month in 2012.
Gardner continued: “The pick-up in activity appears to be fairly broad-based, and it is encouraging that first-time buyers are a key driving factor behind the upturn.”
Last week, the British Bankers’ Association reported that the number of mortgage approvals granted to home buyers lifted to a six-year high of 46,521 in December.