Gazumping, the curse of the 1980s housing boom, is back with a vengeance, estate agents and surveyors say.
A severe shortage of key types of property in sought-after areas has led to cut-throat competition and gazumping - where a vendor ditches an agreed deal in favour of a higher offer.
But others warn that further sharp rises in interest rates could trigger a "catastrophic" crash, pushing thousands into negative equity.
The Royal Institution of Chartered Surveyors said the problem centred on London.
It said the focus was on two- and three-bedroom pre-1960s houses and bungalows. "Competition is increasing for middle-market housing in desirable areas across the country where we are seeing the biggest price rises," Ian Perry, RICS' housing spokesman, said. "Gazumping may be reappearing, particularly at the top end of the market in London."
The survey showed the number of surveyors reporting rising prices outnumbered those seeing falls by 38 per cent - the widest margin for almost a year.
The message from the report was supported by anecdotal evidence.
Gary French of Friend & Falcke in London's Chelsea and Fulham areas, said: "The market is significantly improving with sealed bids occurring. Generally offers are low but gazumping has crept in again."