UK house prices climbed for the third month in a row in September to about £100 short of a record high as rising worker pay and falling interest rates helped make mortgages more affordable for some homebuyers, according to a leading index.

Data released by Halifax, Britain’s biggest mortgage lender, showed that prices climbed by 0.3% last month, extending a streak of rising prices that began in July. The month-on-month increase matches the 0.3% rise recorded in August.

It means that the price tag of the typical UK home edged higher by £859 in cash terms to £293,399 – just shy of the £293,507 peak set in June 2022, three months before the then prime minister Liz Truss’s disastrous mini-budget.

On an annual basis, prices rose 4.7%. That is slightly higher than the 4.3% recorded in August, but still the highest rate of growth since November 2022.

The housing market has been given a leg-up by the Bank of England, which in August slashed interest rates for the first time in four-and-a half years from 5.25% to 5%. It has led to a renewed mortgage price war among commercial lenders, which have been cutting their own mortgage rates in a bid to capture a larger share of the market after months of relatively sluggish growth.

Some, such as Nationwide building society, are also raising the borrowing cap for first-time buyers, allowing some to take on mortgages worth up to six times their earnings, in order to attract new customers.