House prices continue to grow

The annual rate of growth accelerated to 6.6 per cent.

Nationwide said rate rises will signal caution, but it is unlikely to lead to a repeat of the 2004 slowdown.

Commenting on the figures, Fionnuala Earley, Nationwide's group economist, said: "The annual rate of house price inflation picked up for the third consecutive month in August. House prices are now 6.6 per cent higher than at this time last year. This is the fastest annual rate of growth since April 2005 and almost three times faster than at this time last year. The underlying market remains fairly firm with prices increasing by 0.8 per cent in August. The typical house in the UK now costs £167,721. This is £10,412 higher than August 2005 - the equivalent of a rise of almost £30 per day."