House prices shot up by 2.7% in August, according to the Halifax, the highest monthly rise since May 2014.
The surprise leap contributed to a 3% rise in prices over three months and annual house price inflation of 9%. The average house price now stands at £204,674, according to the lender.
“The shortage of secondhand properties for sale on the market is resulting in upward pressure on house prices,” said Martin Ellis, Halifax housing economist.
“At the same time, economic recovery, real earnings growth and very low mortgage rates are supporting housing demand.”
The August figure has taken some analysts by surprise and has caused the second group of leading economists in a week to revise their house price forecasts for 2015 upwards.
Howard Archer, chief economist at IHS Global Insight, described Halifax’s August figure as a “real eye opener”, especially when compared to that of rival Nationwide, which recently reported that house prices rose by a modest 0.3% in August.
In stark contrast to the Halifax, Nationwide said the annual rate of house price growth was the weakest for two years in August.
IHS Global Insight has now changed its prediction on house price growth for 2015, lifting its forecast to 7% from 6%.
“Latest data and survey evidence largely indicate that housing market activity is on the up, and we suspect it will be supported over the coming months by largely helpful fundamentals, notably including stronger earnings growth, high employment, elevated consumer confidence and still very low mortgage interest rates,” Archer said.
On Thursday, the Royal Institute of Chartered Surveyors announced it had changed its forecast for UK house prices, predicting they will end the year 6% higher than they started it. At the start of this year it predicted growth of3%.
“House price inflation has now quickened in each of the last seven months following a sustained period of easing towards the latter half of 2014,” said Rics’s chief economist, Simon Rubinsohn. “And there is good reason for this trend to be sustained into 2016.”