Annual average house price growth accelerated by 12.6% in February according to the latest Nationwide House Price Index (HPI) report, up from 11.2% the month before.

This is the seventh consecutive monthly increase in average house prices according to Nationwide HPI data, with the month-on-month growth rate accelerating.

In February 2022, the monthly change – a seasonally adjusted figure – was 1.7%. In contrast, the monthly change was 0.8% in January 2022.

The average price of a house is now above £260,000, at £260,230, for the first time with a combination of robust demand and limited stock keeping an upward pressure on prices.

In January 2022 the average house price had been £255,556.

Such pressure means the price of a typical home is 20% higher than in February 2020, with the average price rising £29,000 over the past 12 months alone.

This represents the largest ever annual increase in cash terms since the start of Nationwide’s monthly HPI in 1991.

Nationwide chief economist Robert Gardner is surprised as the sustained buoyancy of the market, given recent headline economic data and concerns over the cost of living.

“The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5% in January, and since borrowing costs have started to move up from all-time lows in recent months,” says Gardner.

“The strength is particularly noteworthy since the squeeze on household incomes has led to a significant weakening of consumer confidence.”

The impact of house prices on affordability is clear comments Gardner, who points to the disparity with average income.

This has created a pressure on household finances. According to Nationwide data, the price of a typical home is now equivalent to 6.7 times average earnings, up from 5.8 in 2019.

Inflation is expected to rise above 7% in coming months with many economists forecasting several rate rises from the Bank of England as a result.

Trussle head of mortgage operations Amanda Aumonier welcomes the increase in house price growth but warns inflation and cost of living pressures will inevitability come to impact homebuying.

“As people take stock of their current financial situation and manage the increased cost of living, this could impact the pipeline of homebuyers, decreasing the demand on property and the likelihood of bidding wars which could, together, halt any further growth in house prices,” says Aumonier.

“The next few months of house price growth will be intrinsically linked to the overall economic picture, with household expenditure likely to put the squeeze onto disposable income, and in turn deposit-saving potential.”