House prices rose at their fastest annual rate since 2007 to reach a new record high, according to Halifax.

The lender said that prices were up 10.8% in the year to February, increasing by 0.5% in the last month alone.

Average house prices are now at their highest ever level of £278,123.

Russell Galley, managing director at Halifax, said: “This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing.

“Two years on from the start of the pandemic, average property values have now risen by £38,709 (+16%) since February 2020. Over the last 12 months alone house prices have gained on average £27,215. This is the biggest one-year cash rise recorded in over 39 years of index history.”

Iain McKenzie, CEO of The Guild of Property Professionals, added: “The country is going through a cost-of-living crisis, plagued by rising inflation and plunging consumer confidence – but nobody seems to have told the housing market!

“It’s incredible to think that these latest figures show the fastest annual growth in 15 years and another record high for the average house price, which continues to climb towards £300,000.”

Despite the rises, Andrew Montlake, managing director of mortgage broker, Coreco, cautioned: “There are dark clouds on the horizon. Interest rates are set to rise further to bring inflation to heel, tax hikes are getting ever closer and energy and grocery bills are going through the roof.

“Moving forward, it’s likely that people’s borrowing power will wane as lenders take into account these extra costs and that will cause the market to cool down. But even though rates are rising, we remain in an extremely low interest rate environment with competition among lenders fierce and this will continue to drive a certain level of transactions.”