The latest Nationwide House Price Index has shown that property prices shot up yet again during July as the booming property market showed little sign of slowing down.
Nationwide said that although the rise was slightly weaker than June's 3.3%, it was above the average increase for the past six months of 2.1%.
Annual house price inflation for the year to the end of July was 21%, which is the highest rate since 1989.
The average cost of property nationally is now £108,818.
This news comes despite recent reports that there could soon be a slowdown in the housing and lending markets. On the contrary, research found that there was a severe shortage of properties on estate agent's books.
Alex Bannister, Nationwide's group economist, says: “While the price of equities and goods on the high street both fell in the last month, property prices continued to rise strongly. Despite the latest data for June, showing mortgage lending and house sales declining sharply, it is farfrom clear that this is the beginning of a sustained downturn.
“Not only did June have significantly fewer working days than May because of the Jubilee Celebrations, but the World Cup may also have interrupted homebuying.”
Despite the survey's findings, Nationwide say that for the future conditions for consumers could deteriorate modestly, with higher interest rates and slower income growth likely during the next year. Along with affordability constraints, it predicted, should ultimately lead to a slowing in house price growth.