Halifax attributed the high growth rate to weak prices last year.

Prices also rose monthly by 0.3% in August of this year, compared with the 0.9% increase in July.

According to the report the typical property now costs £292,505 in August, compared with £291,585 in July.

The region with the strongest annual house price growth in the UK was Northern Ireland (9.8%) with the average house price at £201,043.

Wales recorded a 5.5% growth with prices now at an average of £224,433, while Scotland saw a rise of 1.7% with the average price sitting at £205,144.

The North West saw the highest growth rate in England at 4% and average prices reaching £232,917, while London recorded the most expensive property prices in the UK, with an average price of £536,056, a 1.5% rise from last year.

Jeremy Leaf, estate agent and a former RICS residential chairman, said: "The market breathed a collective sigh of relief when first the election result ended lingering political uncertainty and again when interest rates started to fall.

“That added comfort is reflected in this solid, not spectacular, price growth figures from the country’s largest lender and reinforced by recent encouraging mortgage approval numbers.

“These show buyers and sellers did not panic but continued about their business over the summer.

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“However, mortgages are still relatively expensive for many and talk of ‘a painful Budget’ by next Halloween is spooking many into holding off a little longer or at least negotiating harder to avoid what they regard as overpaying."

Tomer Aboody, director at MT Finance, commented: "With a further positive uptick in house prices compared with last year, this demonstrates the confidence among buyers who are taking advantage of lower mortgage rates.

"With the prospect of a further rate cut from the Bank of England in the offing, we are hoping to see higher transaction volumes in the final quarter of the year, although a potentially tough budget in October could deflate the bubble or at the very least, limit that budding confidence."

Maeve Ward, head of intermediary sales at Together, added: “The housing market has continued to improve in August, with prices rising by 0.3% in August as buyer and seller confidence continues to remain strong - even throughout the peak holiday season.

 “With the Bank of England recently announcing its first rate reduction since 2021 and the next announcement due in a fortnight, we should see a continuation of rates among highstreet lenders falling, albeit at a slower pace than before until the next mini-budget.

 “Indeed, to re energise any meaningful economic growth, it’s very likely Labour will be looking for higher levels of public investment to bring about increased private investment in the economy and use the looming budget to make this clear.

“This will hopefully include more funding into house building, which should positively impact the market.”