House prices rose for the third month in a row during September, increasing by a further 1.6 per cent, figures showed today.
The average UK property now costs £163,533, 5.9 per cent or £9,000 more than when prices hit their trough in April this year, according to Halifax.
The group said a combination of increased demand and a shortage of properties on the market had pushed prices up in recent months.
It added that marked improvements in affordability due to the steep house price falls seen since mid-2007 and record low interest rates had been a key factor in stimulating higher demand.
But Martin Ellis, Halifax's housing economist, warned: "Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand.
"There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale.
"This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months."
The price increases seen during the past few months have also pushed up the house price-to-earnings ratio - a key measure of affordability - to 4.48 from a recent low of 4.25 and above the long-run average of four.
Halifax said the annual rate at which prices are falling continued to ease during September, dropping to 7.4 per cent, down from 10.1 per cent in August, based on the average price during the past three months compared with the same period a year earlier.
Prices rose by 2.8 per cent during the three months to the end of September, the first quarterly increase for two years and the biggest since the beginning of 2007.
Today's figures are broadly in line with data reported by Nationwide earlier in the month.
These showed house prices rising by 0.9 per cent during September, the fifth consecutive monthly increase, which pushed the average cost of a home back up to the same level it was at in September last year.Reuse content