Year-on-year house price growth hit 9.7 per cent in the three months to October, according Halifax's house price index - its highest since August 2014.
Prices rose 2.8 per cent in the three months to October to £205,240, up from £202,931 in September and £186,469 in October last year.
But while house price growth may be in rude health, there have been recent concerns about the sector. Yesterday shares in Countrywide, the UK's biggest estate agent, plunged after it issued a profit warning, saying a post-election pick-up in transactions had "failed to materialise in a significant way".
Meanwhile, shares in the UK's largest housebuilders also dipped after a Liberum analyst changed his rating to sell, saying they were over-valued.
But Martin Ellis, Halifax's housing economist, suggested economic conditions, together with improved household finances, had helped house prices.
"Strengthening demand is filtering through in to higher sales levels although the ongoing shortage of supply is acting as a significant constraint on activity."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, added: "Momentum is clearly returning to the housing market as low mortgage rates, high consumer confidence and strengthening wage growth stimulate demand.
"Banks continue to seek to increase their mortgage loan books, and the Financial Policy Committee’s rules on loan-to-income multiples are still not close to biting. As a result, we think think rapid growth in house prices will be sustained; we expect an 8 per cent jump next year."