Residential property prices in the UK are increasing at the fastest annual rate in 17 years, with all regions picking up, according to the latest Nationwide house price index.

The data shows that annual property price growth reached 13.4% in June – the highest level since November 2004.

On a monthly basis house prices have increased by 0.7%, after taking account of seasonal factors, taking the average price of a home to £245,432.

Robert Gardner, the Nationwide chief economist, said: “While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum. Indeed, June saw the third consecutive month-on-month rise, after taking account of seasonal effects. Prices in June were almost 5% higher than in March.”

Northern Ireland and Wales recorded the strongest gains in the second quarter, at 14% and 13.4% house price growth respectively. Scotland posted the weakest house price growth at 7.1%, closely followed by London at 7.3%.

Iain McKenzie, chief executive of The Guild of Property Professionals, commented: “The 13% price rise compared to last June – the highest since 2004 – looks impressive, but it’s important to remember that this time last year the market was mired in lockdown.

“More noteworthy is the three consecutive months of price rises, and a sign of underlying consumer confidence and strength of the housing market.

“All parts of the UK have seen house prices increase, but the good news for many is that mortgage payments remain stable and affordable.”

Tom Bill, head of UK residential research at Knight Frank, is among those who expects UK house price growth to slow down after the summer, dropping to mid-single digits by the end of 2021 as more supply comes through.

He said: “The winding down of the stamp duty holiday and return to a sense of normality will encourage more sellers to list their property and greater balance to return.”

Guy Gittins, chief executive of Chestertons, concurred: “Buyer enquiries and the number of agreed sales reached record heights in Q1 which simply couldn’t be maintained long-term.

“Although the number of buyer enquiries remains at record levels annually and the volume of viewings is at a five-year high, we are now entering a more balanced market.”

Jeremy Leaf, a north London estate agent, believes that there is still plenty of life remaining in the market, but accepts that the market is slowing.

“Demand has moderated after the frenzy of the previous few months,” he said.