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” 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.”
Anna Clare Harper, CEO of asset manager SPI Capital said: “Some in the real estate industry feel this mini boom will be short lived, given economic circumstances and forecasts.
"However, the fundamental drivers of housing demand are strong: we are in an environment of low interest rates, with reduced rates of new buildings coming onto the market and limited existing stock.”
Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics) said: “Demand has lost a little momentum over the past few weeks as the resurgence in Covid-19 and new restrictions on businesses is making some buyers a little more nervous, especially as there is more property available for sale.
“Looking forward, we expect demand to remain fairly solid but transaction times to lengthen a little as some of the economic realities start to bite.”
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.”