British house prices saw the biggest jump in more than 16 years this month when they rose by 13.4% compared to June last year.

Demand is also expected to remain strong in the coming months, mortgage lender Nationwide said today.

In monthly terms, house prices were 0.7% higher than in May as buyers rushed to take advantage of a tax break offered by finance minister Rishi Sunak.

Economists polled by Reuters had expected prices to rise by 13.7% in annual terms and by 0.7% from May.

"While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum," Nationwide's chief economist Robert Gardner said.

The tax break, introduced last year as part of Sunak's emergency support for the economy during the pandemic, had originally been due to expire at the end of March.

But the first £500,000 of any property purchase in England or Northern Ireland are now due to remain exempt until the end of June, and a £250,000 tax-free allowance will run until the end of September.

"Underlying demand is likely to remain solid in the near term as the economy unlocks," Gardner said.

"Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices.

"But as we look toward the end of the year, the outlook is harder to foresee," he added.