House prices have risen at their fastest rate since 2010, but remain significantly lower than they were a year ago, according to Nationwide.
It said the cost of homes in the UK rose by a "surprising" 1.3% in August to an average of £164,729 - up from a 0.8% fall in July.
This was the largest month-on-month increase since January 2010, the building society reported in its monthly house price index.
Nationwide's chief economist, Robert Gardner, said the rise indicates a "fairly stable" housing market.
"This may be explained by the surprising resilience evident in the UK labour market, with further increases in employment in recent months, even though the UK economy has remained in recession," he said.
But he highlighted that the monthly rise is likely to have been impacted by one-off factors, including the end of the stamp duty holiday for first time buyers.
Tough economic conditions throughout the UK continue to affect the market, with prices still 0.7% below the average house price of over £165,914 in August last year, Nationwide said.
Property analysts Hometrack, which also released figures this week, found that average house prices fell by 0.1% in August because of a drop-off in buyer demand.