UK property prices rose by 2% in August to hit their all-time highest level of £224,123, according to Nationwide.

Last month was the highest monthly rise in prices since February 2004, according to the building society.

It means house prices in August were 3.7% higher than the same time last year, as the property market continues to enjoy a mini-boom, fuelled by the release of pent-up demand and the Stamp Duty freeze.

Robert Gardner, Nationwide’s chief economist, said: “The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.

“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.”

However, Miles Robinson, head of mortgages at online mortgage broker Trussle, warned: “There’s still a chance that we’re experiencing a ‘mini-boom’ ahead of the real after-effects of the pandemic setting in.

“Towards the end of the year, several government support schemes are set to come to an end, including the furlough scheme, which could increase unemployment rates in the UK to 3.5 million.

“For some, the home ownership journey is already challenging. First time buyers, for example, are facing stricter criteria, with some lenders capping financial support from ‘The Bank of Mum and Dad.’ This, in addition to the shrinking range of high loan-to-value products, is leaving many people locked out of the market.”