House price growth increased by 3% year-on-year in April, with the average house price standing at £278,880, Nationwide has revealed.

Month-on-month, the average property price rose by 0.4%, after increasing by 0.9% in March.

The building society said that despite uncertainty caused by developments in the Middle East and the subsequent rise in energy prices, the UK housing market has "continued to regain momentum" following the slowdown recorded around the turn of the year.

Chief economist at Nationwide, Robert Gardner, said: "The market is likely being supported by the relative strength of household finances. In aggregate, household debt is at its lowest level relative to income for around two decades, and sizeable savings buffers have been built up in recent years, although these have not been evenly distributed across households.

"Moreover, housing affordability had been improving steadily in recent years due to a combination of income growth outpacing house price growth by a wide margin and a modest decline in mortgage rates."

The update comes after the Bank of England held the base rate at 3.75% yesterday, stating that the prospects for energy prices remain "highly uncertain".

Gardner stated that looking ahead, UK economic growth is likely to lead to "somewhat weaker and inflation higher" than previously expected.

He concluded: "The UK economy and housing market have proved remarkably resilient in recent years. This provides some confidence that, if the latest shock passes relatively quickly, and energy prices normalise in the quarters ahead, any near-term softening in the housing market will also prove short lived."

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