The building society’s house price index showed prices rose 1.4% in December to an average £175,826 but were still about 5% below their 2007 peak.

The figures are based on the society’s own mortgage lending data so do not give a complete overview of the housing  market.

Robert Gardner, Nationwide’s chief economist, said: “The UK housing market followed the trajectory of the wider economy through 2013, gaining momentum as the year progressed. 

“The average monthly increase in house prices rose from 0.4% in the first half of the year to 1% in the second half of 2013.  Overall, prices increased by 8.4% in 2013, though they remain around 5% below the all-time highs recorded in late 2007.

“The upturn also became increasingly broad based over the course of 2013. For the second successive quarter, all thirteen UK regions saw positive annual house price growth in Q4, though London and the South East continued to record the strongest pace of growth.”

He added: “A large part of the pickup in the housing market can be attributed to further improvements in the labour market and the brighter economic outlook, which helped to bolster sentiment amongst potential buyers. 

“Policy measures also played an important supporting role by helping to keep mortgage rates close to all-time lows and improving the availability of credit, especially for those with smaller deposits.”