The average UK house price is approaching a quarter of a million pounds after property values surged by 7.3% annually, according to an index.
Halifax said the 7.3% annual jump in September was the strongest growth since June 2016.
It took the average UK house price to £249,870. Property values climbed by 1.6% month on month.
Halifax also said that the number of mortgage applications it has been receiving from both first-time buyers and home-movers is the highest in 12 years.
Despite the price jump and current strong market demand, Halifax warned that a downward pressure on house prices should be expected “at some point” in the months ahead.
Russell Galley, managing director, Halifax, said: “The average UK house price is now approaching £250,000 after September saw a third consecutive month of substantial gains.
“The annual rate of change will naturally draw attention, with the increase of 7.3% the strongest since mid-2016.
“Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market.
“Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May.
“Across the last three months, we have received more mortgage applications from both first-time buyers and home-movers than anytime since 2008.
“There has been a fundamental shift in demand from buyers brought about by the structural effects of increased home-working and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March.”
But he said it is “highly unlikely” that the market will remain immune from the economic impact of the Covid-19 pandemic.
Mr Galley continued: “The release of pent-up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane.
“And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.
“Therefore, while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”
Mark Manning, managing director of Leeds-based estate agent Manning Stainton, said: “We’re currently seeing a real surge in demand from second- and third-steppers looking to move up the ladder while they can still take advantage of the stamp duty break, so the market looks set for another really strong month.”
Laith Khalaf, a financial analyst at AJ Bell, said: “There is of course concern that the property market is having a Wile E Coyote moment – it’s run off the end of a cliff and just hasn’t looked down yet.”
He said that, as Government economic support is withdrawn, it is likely that job losses will mount, which will clip the wings of the housing market.
But Mr Khalaf said low interest rates, the shift towards home-working which is making people reassess where they live, and Government policy with new 5% deposit mortgages should still help drive activity.
Halifax’s report was released as a separate index from the Office for National Statistics (ONS) provided an earlier snapshot of the housing market, back in July.
The ONS said that in July average UK house prices hit a new high of £238,000, after increasing by 2.3% annually, down from 2.9% in June.
It added that in July average house prices in England increased to £255,000 (2.5% annual growth), in Wales to £170,000 (3.6%), in Scotland to £155,000 (0.4%) and in Northern Ireland to £141,000 (3.0%).
The ONS report also noted that there had been a shift towards transactions on cheaper properties in April this year.
It suggested that, as people were advised not to move during the tightest restrictions, sales completed during that time may have been more concentrated than usual among those without complicating factors such as a housing chain.
For example, first-time buyers may have been freer to complete transactions than existing home-owners who typically live in more expensive homes.
Figures from UK Finance indicate that purchases by former owner-occupiers fell the most sharply in April 2020, at 61% annually, compared with a fall of 53% for first-time buyers and 54% for buy-to-let purchases.
The ONS said that subsequent price increases in June may have reflected pent-up demand following the easing of lockdown restrictions, particularly at the higher end of the price scale.