British house prices rose 1.1 per cent in June to lift the annual rate to 11.1 per cent, its highest level more than two years, the Nationwide building society said today.
The monthly rate was more than twice May's 0.5 per cent gain and was the strongest since December, suggesting four interest rate rises in less than a year have not had any significant effect on house price inflation.
June's rise took the price of a typical house to £184,070, more than £18,000 higher than at the same time last year. Nationwide said that was equivalent to a rise of £50 a day.
Nationwide chief economist Fionnuala Earley said news of robust house price growth increased the likelihood the Bank of England would raise interest rates to 5.75 per cent next month and possibly to 6 per cent beyond that.
Policymakers voted narrowly to hold rates steady at 5.5 per cent this month, with four of the nine-member Monetary Policy Committee, including Governor Mervyn King, wanting a rise, and have said rates will need to rise to curb price pressures.
Figures from the British Bankers' Association on Wednesday showed mortgage approvals in May were 4 per cent lower than a year ago.