Nationwide say that the average UK house price rose by nearly £24,000 during 2021, the biggest increase ever recorded in a single year in cash terms.
The typical price of a home in Britain reached a record high of £254,822 in December, marking a £23,902 increase over the past year.
But in the South East, prices rocketed even higher, with the average home in Tunbridge Wells now fetching £410,992, according to Nationwide, up by £33,316 from this time last year – an increase of 8.8 per cent.
Chief economist at the building society Robert Gardner said: “The price of a typical UK home is now at a record high of £254,822, up £23,902 over the year – the largest rise we’ve seen in a single year in cash terms.
“Prices are now 16 per cent higher than before the pandemic struck in early 2020.”
Nationwide said house prices were 10.4 per cent higher annually and 1.0 per cent higher month on month in December.
Looking at what has been behind the price increases, Mr Gardner said demand for homes has remained strong despite the ending of the stamp duty holiday this year.
He said: “Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30 per cent higher than over the same period of 2019.
“At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”
Mr Gardner said the outlook for the housing market ‘remains extremely uncertain’.
He continued: “The strength of the market surprised in 2021 and could do so again in the year ahead.
“The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth.”
Nationwide also published quarterly figures showing house price trends in the regions of England.
Mr Gardener said: “The South West was the strongest performing English region, with annual price growth of 11.5 per cent, the largest calendar year increase in the region since 2004.”
The South East as a whole saw only slightly narrower gains, he said with prices increasing by 11.3 per cent to £329,869, an increase of £33,579.
