The average house price was £271,209 last month, up 0.1% from June, seasonally adjusted, and the 12th monthly rise in a row, the Nationwide Building Association said. This brought the annual change to 11% from 10.7%. The market has been surprisingly strong throughout the Covid pandemic and despite the worsening cost of living crisis. It has been boosted by a strong labor market, a persistent shortage of real estate on the market and a “scramble for space” amid the rise of home working. “The housing market has maintained a surprising degree of momentum given the growing pressures on household budgets from high inflation, which has already driven consumer confidence to record lows,” said Nationwide chief economist Robert Gardner. “While there are tell-tale signs of activity slowing, with a fall in the number of mortgage approvals for home purchases in June, this has yet to fuel price growth.” Gardner said demand continued to be supported by strong labor market conditions, in which the unemployment rate remains near 50-year lows and job vacancies near record highs. “At the same time, limited housing stock on the market has helped maintain upward pressure on house prices,” he added. EY’s forecasting team Item Club noted that cost of living pressures are being disproportionately felt by low-income households, particularly those in rented accommodation. Nicholas Finn, managing director of Garrington Property Finders, said: “While many estate agents remain busy, buyer motivations are changing. Where previously price growth was fueled by a market full of confidence, today’s market is fueled by people’s desperation to find a home before interest rates rise further and the cost of living crisis bites deeper.” Nationally, however, other experts expect the market to slow as pressures on household budgets intensify in the coming quarters and inflation is expected to reach double digits this fall. Further rate hikes by the Bank of England will also cool the market if they feed into mortgage rates, with the BoE expected to announce a further hike on Thursday. Mortgage completions by first-time buyers have remained resilient and are now 5% above pre-pandemic levels, even as house price growth continued to outpace wages by a wide margin, raising the deposit barrier and, along with higher interest rates, has pushed up mortgage payments relative to incomes, Gardner said. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Cash transactions make up just over a third of all deals, at 35%, partly reflecting an aging population in which more people own their homes. But properties bought for investment, such as holiday homes or rental apartments, are also an important part of the cash market. Buy-to-let purchases that include mortgages also remain higher than pre-pandemic levels. “Sentiment is likely boosted by the fact that rental demand remains strong, with upward pressure on rents, which may encourage owner-occupiers to enter the market, particularly if they view ownership as a hedge against inflation,” Gardner said. According to property website Rightmove, rents are at record levels. The average asking rent outside London hit another new record of £1,126 a month in the second quarter.