Hopes for a recovery in the housing market were fuelled today as Halifax recorded a 1.6 per cent increase in house prices for September.

Halifax said that house prices rose for the third consecutive month in September and have risen in five monthly periods so far in 2009.

House prices nationally have risen by 1.7 per cent since the end of 2008, the building society said.

Prices have still fallen by 7.4 per cent year-on-year, according to Halifax, which is an improvement on the annualised fall of 10.1 per cent that was recorded in August.

Martin Ellis, Halifax's housing economist, said: "The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months."

He said that mortgage payments as a proportion of disposable earnings were well below the average for the last 25 years, which has further increased demand for housing.

Mr Ellis warned, however, that the rise in house prices was not guaranteed to continue.

He said: "Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale.

"This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months."

Howard Archer, chief UK and European economist at IHS Global Insight, said: "While it is now looking very likely that April marked the trough in house prices on the Halifax measure, we suspect that they will be prone to relapses over the coming months and we very much doubt that a sharp, sustainable upward trend in house prices is in the process of developing.

"Much will clearly depend on whether the economy can sustain a probable return to growth in the third quarter, how much further unemployment rises, how quickly and to what extent credit conditions ease, and how many properties come on to the market over the coming months."

Figures released by the Nationwide last week suggested that house prices in Britain were back to the levels last seen before the collapse of Lehman Brothers in September 2008, after a fifth consecutive month of increasing prices.

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