UK house prices rose again in February, defying higher mortgage rates and surging inflation to increase the most in cash terms since 1991.

The Nationwide House Price Index climbed at an annual rate of 12.6 per cent in February, up from a record January rise of 11.2 per cent. The price of a typical UK home is now £29,162 more than a year ago — the largest year-on -year increase recorded by the lender.

Robert Gardner, Nationwide’s chief economist, said a combination of “robust demand and limited stock of homes on the market” had kept pressure on prices, despite inflation reaching a 30-year high upward and pushing borrowing costs upward.

“The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation . . . the squeeze on household incomes has led to a significant weakening of consumer confidence,” he said.

The month-on-month increase in house prices for February was 1.7 per cent.

the average price of a home in the UK is now £260,230 — and has increased more than £44,000 since February 2020, before the start of the pandemic.

Gardner said the uncertain economic outlook, particularly with war in Ukraine further denting confidence and inflation expected to rise, would mean house price growth would slow in the year ahead.

“Housing affordability has already become more stretched, in part because house price growth has been outstripping earnings growth by a wide margin since the pandemic struck,” he said.

“The price of a typical home is now equivalent to 6.7 times average earnings, up from 5.8 in 2019.”