UK house prices continued to pick up in September, though growth remains slow amid high valuation levels, a key survey has found. Halifax, which is part of the HBOS PLC banking group, revealed that house prices in September rose by 1.2 pct from the previous month, following a 1.6 pct gain in August. On an annual basis, house prices were 3.0 pct higher in September, significantly lower than the increase of 20.5 pct in the same month last year. In the third quarter, however, house prices rose by 1.8 pct, the biggest quarterly rise since the third quarter of 2004. "The pick-up in monthly house price inflation in August and September is consistent with the rise in market activity over the past few months," said Halifax chief economist Martin Ellis. Healthy household income growth and historically high levels of employment are supporting the housing market, while the Bank of England's decision to cut interest rates in August has also given the market a boost, he said. However, housing demand is expected to be constrained due to the fall in economic growth this year and the continuing high level of house prices in relation to average earnings, which will prevent a sustained surge in house prices, Ellis added. The annual rate of house price inflation has slowed significantly in all the regions of Britain over the past 12 months and is now in single figures throughout the mainland, Halifax said. The biggest gains in house prices over the past year have been in the North West at 9.1 pct and in Yorkshire and the Humber at 8.0 pct. Four regions have experienced small falls in prices during the last 12 months, with prices in the East Midlands falling by 0.4 pct, in East Anglia by 0.8 pct, in the South East by 1.1 pct and in the South West by 1.5 pct, the survey found.