According to the Nationwide House Price Index house prices increased by 0.6% in August, a 3.5% from the same time last year.
August was a slightly flattering month for comparison, however the three month on three month measure of house prices, which is a better measure of the underlying trend, rose by 1.4%, its strongest pace since mid-2010.
Robert Gardner, Nationwide’s Chief Economist, said: “A number of factors appear to be contributing to the recent upturn in house price growth.
“Consumer confidence has increased significantly in recent months, thanks to further modest gains in employment and signs that the UK economy is finally gathering momentum.
“An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the Funding for Lending and Help to Buy schemes, is also enabling more people to take their first steps into the property market.”