The Halifax says house prices rose again in July after dipping last month, making the average price £261,221 and leaving prices 7.6% higher than at the same time last year.

Last month, average prices were 8.7% up on a year ago.

The lender said it expected prices to settle further after the recent spate of strong rises, which has been fuelled in part by tax breaks on stamp duty.

But it said a shortage of homes was likely to support prices.

The average property price across the UK was £261,221 in July, with the highest rises of 13.8% seen in Wales and the lowest – 2.5% – in London.

The government gave some home buyers a temporary break from paying the set tax paid on certain housing transactions. It completely waived the payment on the first £500,000 of any property purchase in England or Northern Ireland, but that break finished at the end of June.

Now a 5% tax kicks in at £250,000 for properties up to £925,000. Rates on properties above that are higher.