"UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment."
Prices in the three months to September were 4.0% higher than in the same three months a year earlier, also the highest growth rate since February.
House prices rose by 0.8% between August and September, following a 1.5% increase in August.
Russell Galley, Managing Director, Halifax Community Bank, said: “The annual rate of growth has picked up for the second consecutive month, rising from 2.6% in August to 4.0% in September. The average house price is now £225,109 – the highest on record. House prices in the three months to September were 1.4% higher than in the previous quarter, the fastest quarterly increase since February.
“While the quarterly and annual rates of house price growth have improved, they are lower than at the start of the year. UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment. However, increasing pressure on spending power and continuing affordability concerns may well dampen buyer demand. There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "Once again, the market has proved its resilience and confounded the doom mongers. Not that there is too much to get excited about with these figures which confirm what we have seen at the coalface recently - that prices are holding up reasonably well where vendors are realistic, partly in response to a continuing shortage of stock.
"Sadly, we are not seeing the hoped-for autumn bounce but a steady market is more than welcome with so much uncertain economic news."
Alex Gosling, CEO of HouseSimple, added: "It would be easy to get carried away by these figures, but let's not forgot prices are still being supported by low supply, low mortgage rates and low unemployment, rather than a sudden rise in buyer demand.
"Saying that, we are definitely starting to see more optimisim from buyers and sellers, and confidence in the stability of the housing market.
"Our research shows that new sellers in September were up a fifth on August.
"This could be attributed to low numbers of new properties being marketed over the summer. However, we have seen more new sellers last month than any single month in the past two years, which suggests it's not simply down to the lull in activity over the holiday period.
"Buyers and sellers are still concerned about Brexit, but they are possibly more confident that whatever deal is struck, the fallout won't be as bad as first predicted."
