U.K. house prices increased 0.8% month over month in September, down from the revised 1.5% increase registered in August, mortgage lender Halifax said.
House prices were up by an annual 4.0% in September, the highest rate recorded since February. In August, house prices increased by 2.6% from the previous month.
Prices in the three months to September increased by 1.4%, the fastest three-month expansion since February, according to the mortgage lender.
Average house prices stood at £225,109 in September, up from the revised £223,271 in the previous month.
"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," Halifax Community Bank Managing Director Russell Galley said.
He added: "U.K. 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."