Separate data released by the Royal Institution of Chartered Surveyors (RICS) Tuesday showed that house prices had hit their highest level in 11 years.  The government's "Help to Buy" and "Funding for Lending" scheme have been blamed by some for helping to fuel a dangerous rise in house prices, and in September RICS called for the Bank of England to take action to cap future house price rises.  Under the "Help to Buy" scheme, the British government guarantees part of a home-buyer's mortgage on properties worth up to £600,000 ($918,000).  But Howard Archer, chief U.K. and European economist at HIS Global Insight, said that there was another factor boosting house prices: "A shortage of new properties for sale compared to demand could be an increasingly significant factor pushing up prices."  Indeed, research by estate agency Savills also published Tuesday revealed that London especially is in the midst of a "growing housing crisis" and needs to build 50,000 new homes a year to address the issue.  (Read More: UK housing shares surge on Goldman's conviction)  In its report, Savills argued that the population of Britain's capital is set to grow by one million people by 2021, and the majority of London households earn less than £50,000 a year. As such, the bulk of new homes should be aimed at the lower end of the market, costing up to £280,000. According to the ONS, however, the average house price in London was £434,000 in September – significantly higher than the England average of £255,000.  As such, it is London that has been driving the average U.K. house price rises. But Archer stressed that despite the capital's lead, Tuesday's housing market data would likely do little to ease concerns about a new housing market bubble.  Barnes agreed that – excluding London - U.K. property prices were "not in bubble territory yet." Outside of London and the South East, U.K. house prices increased by 1.4 percent in the 12 months to September 2013, according to the ONS.  But he added: "Where I see the real risk is not so much in prices themselves, but in household debt."  In a further sign of booming housing market activity, the Council of Mortgage Lenders said Tuesday that lending in the third quarter of 2013 was at its highest quarterly level since 2007, with mortgage advances up over 20 percent year-on-year in September.  "The U.K. has significant levels of household debt - most of which is based on mortgages. All you need is a short, sharp shock in terms of interest rates and a lot of households would be thrown into dangerous territory," Barnes warned.
Reports that a seaside village has been put up for sale in England have focused more attention on the turnaround in the country's property market.