House prices are continuing to increase despite the growing cost of living crisis, reports the Nationwide building society.
Nationwide said that house prices were up 11% in the last 12 months, although the increase over the last month was just 0.1%.
"The housing market has retained a surprising degree of momentum," said Robert Gardner, Nationwide's chief economist.
Although he said that there were "tentative signs of a slowdown in activity".
The July figure reported by Nationwide was slightly ahead of June's annual rise of 10.7% and left the average house price at £271,209.
"Demand continues to be supported by strong labour market conditions, where the unemployment rate remains near 50-year lows and with the number of job vacancies close to record highs," said Mr Gardner.
"At the same time, the limited stock of homes on the market has helped keep upward pressure on house prices."
He said rising interest rates could "exert a cooling impact on the market".
"We continue to expect the market to slow as pressure on household budgets intensifies in the coming quarters, with inflation set to reach double digits towards the end of the year."
First-timer buyer mortgage completions remain in the region of 5% above pre-pandemic levels, according to Nationwide, despite the rising affordability pressures as a result of the cost of living squeeze.
Cash transactions make up over a third of all deals, at 35%, partly as the result of an ageing population in which more people own their homes outright. However, properties bought for investment purposes, such as holiday homes or buy-to-let flats, are also an important part of the cash market.
Buy-to-let purchases which involve a mortgage also remain higher than pre-pandemic levels.
“Sentiment is likely buoyed up by the fact that rental demand remains strong, with upward pressure on rents, which may be encouraging landlords to enter the market, particularly if they view property as a hedge against inflation,” said Mr Gardner.
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