There has been a “fundamental shift in demand" from house buyers for more space caused by the working from home trend during the pandemic, according to Halifax.
In its latest house price index, published today (October 7), the lender said house prices had risen 1.6 per cent the three months to September, leaving them 7.3 per cent up on the same month last year.
The lender had also received more mortgage applications from both first time buyers and homemovers than anytime since 2008.
Russell Galley, managing director at Halifax, said: “The average UK house price is now approaching £250,000 after September saw a third consecutive month of substantial gains.
"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."
Nicky Stevenson, managing director at estate agent Fine & Country, called the trend a "feeding frenzy for larger homes".
She said: "Historically, the market has traditionally looked to first-time buyers for an indication of direction. However, it is existing homeowners with the buying power to spend more who have been driving house price growth over the past couple of months, fuelled by a desire for more space.
“The share of transactions being taken up by more expensive properties has grown and this role reversal has been responsible for the steep upward lurch in valuations."
However both Mr Galley and Ms Stevenson warned of a flip side to the data.
Mr Galley said it was “highly unlikely” the housing market will continue to remain “immune” to the economic impact of the pandemic.
He added: “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.”
Mr Galley said he expected “significant downward pressure” on house prices in the months ahead.
Andrew Montlake, managing director at Coreco, commented: “A lot of people have decent equity and remain in secure jobs and we expect this demographic to maintain a certain level of transactions during the next 12 months as people move out of cities in search of bigger houses and more outdoor space.
“The countryside is the new city, rural the new urban, and that will continue to drive demand during the tough months ahead.”
Shaun Church, director at Private Finance, said buyers were also scrambling to lock in low rates.
Mr Church said: “Price jumps in September are likely being driven by buyers rushing to take advantage of historically low interest rates.
"Cheap financing is coaxing on-the-fence buyers to bring property purchases forward and rush into the market.”