The cost of houses in the UK is reported to have gone up nearly £225 every day in May, the largest rise in more than a decade.
The average UK property value rose by 3.9% last month to £184,464, from £177,648 at the end of April, according to figures released by the Halifax.
It was back in October 2002 that prices were rising by 4.2% month-on-month.
Earlier this week, Nationwide reported that house prices have now risen above the peak just before the financial meltdown in 2008.
Stephen Noakes, mortgages director at Halifax, said: "Demand is still strong and continues to be supported by a strengthening economic recovery.
"Consumer confidence is being boosted by a rapidly improving labour market and low interest rates, although growth in average earnings still remains weak.
"However, there are signs of a revival in housebuilding which should bring supply and demand into better balance and curb upwards pressure on prices over the medium and longer term."
But Halifax urged people to pay more attention to quarterly rather than monthly figures as these are deemed a more reliable indicator of the market.
House prices fell in both March and April before seeing a strong increase in May which meant the quarterly measure was 2% higher than in the three months to February.
Banks are starting to place tougher limits on high-value mortgage landing in a move which could send a signal that property values cannot continue to rise indefinitely.
Tougher mortgage lending rules came into force at the end of April obliging people to answer probing questions about their personal spending. “Stress” tests are also in place to ensure customers can repay if interest rates rise.
Some analysts believe these rules, coupled with the fear of interest rate rises and inflated house prices, is helping put a brake in some areas, such as London and the South East.
The Bank of England reported this week that mortgage approvals in April were 17% below January’s high and levels were the lowest since last summer.
First-time buyers accounted for 48% of all purchases in May, up from 38% in the previous month, driving the housing market recovery across the UK. Help to Buy purchases accounted for 9% of the total market.
