According to one index, house prices rose an average of more than £24,500 in 2021, the biggest annual cash increase since 2003.
Halifax said the value of typical UK property reached a new record high of £276,091 in December 2021.
Asset prices hit new record highs eight times last year, according to its monthly index, despite the effects of the coronavirus pandemic.
But house price growth is expected to be very slow this year, the report said.
The average UK house price increased by 9.8% year-on-year and 1.1% month-on-month in December.
Russell Galli, managing director of Halifax, said: “UK home prices climbed again for the sixth straight month in December, rising 1.1%.
“The average price for a property is now £276,091, an increase of over £24,500 compared to December 2020, marking the strongest year-on-year cash increase since March 2003.
“The housing market defied expectations in 2021, reaching 3.5% quarterly growth in December, a level not seen since November 2006.
“In 2021 we saw the average home price reach new record highs on eight occasions, despite the UK being under lockdown for the first six months of the year.
“The lack of opportunities for people to spend while the restrictions were in place helped boost domestic cash reserves.
“This factor, along with the space race resulting from stamp duty holidays and housework, will encourage buyers to go ahead with home purchases planned for this year.
“The expansion of the government’s job and income support schemes also supported the labor market and may have given some families the confidence to move forward with purchases.
“A lack of homes available for sale, and historically low mortgage rates, have also helped drive annual housing price inflation to 9.8%, its highest level since July 2007.
“Looking ahead, interest rates may rise further this year to cope with rising inflation, and increasing pressure on the household budget suggests that home price growth will be significantly slower.
We expect home prices to maintain their current strong levels, but at a slower pace compared to the last two years
“We expect house prices to maintain their current strong levels but the growth will be at a slower pace compared to the last two years.
“However, there are a number of variables that can drive home prices either way, depending on how the pandemic affects the economic environment.”
Looking at annual home price growth across the UK, Wales remained the strongest performer, registering annual home price inflation of 14.5% in December.
The rate of growth in Wales was slightly lower than the 14.8% increase recorded in November.
Northern Ireland was also one of the strongest performing parts of the UK, with home prices increasing by 10.6%.
House prices in Scotland increased by 9.7% year over year.
In England, the North West was the strongest region, with house prices increasing by 11.8%.
London remained the weakest performing region for annual housing price inflation, rising 2.1%.
According to Halifax, the average home prices across the UK in December 2021 are following the annual increase:
– East Midlands, £225,106, 9.1%
– East England, £319,447, 8.1%
– London, £525,351, 2.1%
– North East, £159,694, 8.3%
– North West, £211,954, 11.8%
– Northern Ireland, £170,946, 10.6%
– Scotland, £192,988, 9.7%
– Southeast, £374,454, 8.1%
– South West, £287,774, 11.0%
– Wales, £205,579, 14.5%
– West Midlands, £234,263, 8.8%
– Yorkshire and Humber, £192,210, 9.7%