House prices in the UK increased by 5.4% in the year to August, according to the Halifax's latest house price survey.

It is the highest annual rate recorded since June 2010.

The survey also revealed the average price of a house passed the £170,000 mark for the first time in five years. However, the prices are still significantly lower than August 2007 when the market peaked. House prices were almost £200,000 on average in 2007.

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The bank said the improvement in the housing market was down to an improving economy, low interest rates and government-backed schemes, such as Help to Buy.

The Halifax estimates that the average price of a house or flat in the UK is now £170,231. The last time house prices were higher than £170,000 was in September 2008.

Elsewhere, the number of mortgage approvals for house purchases - an indicator of completed house sales - grew by 10% between the first and second quarters of 2013. In July alone, there were 60,600 approvals, which is the first time since 2008 that the number has exceeded 60,000 since 2008.

Martin Ellis, housing economist for the Halifax said: "Overall, house prices are expected to rise gradually over the remainder of the year."

(JP/MH)