House prices rose for the fifth month since May, but experts warned that it was unlikely to continue at the current rate.
Helped by gains of 1.4% in both July and August, the 0.9% rise in the average cost of a UK home in September brought property values in the month to £161,816 - levels not seen since the same time last year.
According to data from the Nationwide Building Society, the latest increase has made September the first month since March 2008 which has not seen negative annual house price inflation.
The last three months to September recorded the biggest increase on this measure for five years with an increase of 3.8% from April-June period.
Although they are 13.5% lower than the peak of October 2007, house prices have increased by 4.1% since January this year.
Despite the encouraging trend, Nationwide predicted that the current rate of increase was unlikely to continue due to rising unemployment and ongoing problems in the mortgage market.
Martin Gahbauer, chief economist at Nationwide, said: "The further increase in house prices is very much consistent with improvements in a broad range of economic and financial indicators over the last few months, all of which suggest that the most intense phase of the recession and financial crisis has probably passed.
"However, given that the housing market still faces considerable headwinds in the form of high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it would be surprising to see house prices continuing to increase at the very strong rate seen in recent months."
He added that transaction volumes were still running at around half the level they were at before the downturn, and at a level that would usually be too low for house price rises.
He said at the current rate at which mortgage approvals for house purchase were rising, it would take another 18 months for sales volumes to recover to their pre-downturn level.
All regions of the UK saw house price rises during the third quarter of the year, compared with the previous three months.
Copyright © Press Association 2009