House prices on climb as the regions spring back into life

House prices are rising at their fastest rate since May 2007 as London property surges ahead and many regional markets show their first positive growth for more than five years, latest research suggests.

The 0.5 per cent rise in housing prices reported by property analysts Hometrack in September adds to the evidence of renewed momentum behind a housing recovery, which has fuelled concerns over runaway prices.

The report comes as the Government plans to launch its controversial Help to Buy scheme, allowing people in England to take out 95 per cent mortgages, three months earlier than planned.

Hometrack found 41 per cent of local markets reporting higher prices in September, against just 6 per cent a year earlier. Its director of research, Richard Donnell, said talk of a housing bubble was “overstated” as prices – particularly in the regions – are rising from low base compared with inflated markets like London.

He added: “The impetus for higher growth is coming from a burgeoning recovery across regional housing markets, especially across the South-East.”