Newcastle saw the biggest housing market jump year on year among England’s cities outside London, with prices up by 11 per cent to reach £173,296 (€202,372) on average.

House prices around the UK recorded their fastest growth in almost three years in a further sign that the market is gathering pace, Nationwide has reported.

The annual increase of 1.9 per cent registered in June pushed average UK prices to £168,941 (€197,000), marking the strongest year-on-year uplift seen since September 2010.

On a month-on-month basis, house prices rose by 0.3 per cent in June, marking a slight slowdown compared with a 0.4 per cent rise recorded the previous month.

The building society said that Government efforts to kick-start the market, as well as a lack of available homes to choose from, are helping to bolster house prices.

However, there are big regional divides, with prices in London now standing at a new all-time high at £318,214 (€371,000) on average, which is 5 per cent above their previous 2007 peak.

Nationwide’s chief economist, Robert Gardner, said London “has seen the greatest recovery in prices of any region”.

By contrast, prices across the UK are still around nine per cent below their pre-crisis peak.

Prices in England are currently five per cent lower than those seen in 2007, while they are 13 per cent down in Wales, 12 per cent lower in Scotland, and have plummeted by 53 per cent in Northern Ireland compared with their 2007 levels.

Ten out of 13 areas across the UK have seen house prices increase over the past year, while three – Scotland, Northern Ireland, and Yorkshire and Humberside – have seen falls.

London has seen the strongest annual growth at 5.2 per cent, followed by East Anglia, which saw house prices increase by 3.6 per cent year on year.