HOUSE prices soared ahead by 3.3 per cent during June as strong consumer confidence continued to support the buoyant market, figures showed yesterday.

The jump pushed house price inflation up to 19.8 per cent for the year to the end of June, and the average house price to £106,693, Nationwide said.

During the three months to the end of June, property prices rose by 7.5 per cent the fastest quarter's growth since 1989.

Alex Bannister, Nationwide's group economist, said: ''The housing market continues to hold up because of current economic conditions, notably high employment levels and low mortgage rates.

''But its strong growth in recent months is being driven by high levels of confidence and the expectation that prices will rise strongly over the next few years.''

He added that, barring a major economic shock such as a sharp rise in unemployment or mortgage rates, prices look set to continue growing.

The boom in mortgage lending looks set to continue with approvals for new loans reaching a record level during May, figures showed yesterday.

The British Bankers' Association said that during May its members approved 253,900 new mortgages collectively worth £16.5bn.

The group said the level, which was the highest since records began in 1997, was 25 per cent up by number and 39 per cent higher by value than approvals for the same month of last year.

It added that the loans would feed into strong lending in the coming months.

The increase was led by a jump in the value of mortgage approvals for house purchase, with these rising by 29 per cent compared to the same month the previous year to £9.59bn.

The average amount people were borrowing reached £88,700.