House prices rose 1.5% month-on-month in September as Government stimulus schemes inflate the property market, official figures showed.
Data from the Land Registry revealed house prices in England and Wales were up 3.4% on a year earlier, to make an average property worth more than £167,000.
Separate data from property analyst Hometrack showed that momentum has continued into October, with h ouse values rising by 0.5% month-on-month as the proportion of the asking price home buyers were willing to pay edged close to an all-time high.
The Land Registry revealed a 9.3% surge in house prices in London over the past year. But that compared with an annual gain of just 0.6% in the North West and 1.3% in the North East, while prices in Wales fell 1.7% over the year.
A new phase of the Government's flagship Help to Buy scheme launched this month and is set to inject further activity into the housing market as lenders offer state-backed mortgages to aspiring first-time buyers and home movers with deposits as low as 5%.
Lenders representing most of the mortgage market have now come on board the scheme, although only state-backed lenders Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland have unveiled their products under the initiative so far.
IHS Global Insight chief UK and European economist Howard Archer said the Land Registry figures will "fuel concern that house prices are now starting to firm markedly amid increasing activity".
But he said the regional differences show it is " still premature to talk of a housing bubble outside of London".
The Hometrack data marks the ninth month in a row of rises and also showed prices across England and Wales were 3.1% higher in October than they were a year ago.
The proportion of the asking price achieved jumped to 95.2% in October from 94.7% the previous month. This is just half a percentage point off an all-time high of 95.7% of the asking price typically achieved at the height of the property boom in 2007.
Prices in London have risen by 0.8% month-on-month and London sellers are typically achieving 97.2% of their asking price, Hometrack said. Sellers in Wales are achieving the lowest proportion of their asking price on average, at 92.8%.
Houses in London take just over four weeks to sell on average amid continued demand from wealthy overseas buyers in the capital, compared with slightly more than eight weeks across England and Wales. Demand from prospective buyers in London surged by more than 6% month-on-month, helping to maintain the upward pressure on prices there.
The North East was the only region not to see any change in prices over the month, Hometrack said, and rises were recorded everywhere else. Prices increased by 0.1% in the East Midlands and the North West, by 0.2% in Wales and Yorkshire and Humberside, by 0.3% in East Anglia and the West Midlands, by 0.4% in the South West and by 0.7% in the South East.
In a sign that house prices could push up further amid surging buyer demand, the shortage of homes for sale continued in October as the number of new properties listed dropped by 1.6%, while the number of new buyers registering with agents rose by 2%.
But the time that homes are spending on the market also rose slightly during the month, from just under eight weeks in September. Hometrack said this indicates that buyers are becoming more "price sensitive" and some may have become influenced by concerns that the country could be heading for a house price "bubble", with people over-stretching themselves.
Richard Donnell, director of research at Hometrack, said that a "chronic lack of supply" has been driving house price growth.
He said: "Growth in new sales being agreed is running at 4-5% per month and this is continually eroding the stock of homes for sale.
"In contrast, levels of demand have grown by 3% in the last two months. Improving confidence amongst buyers has been fuelled by low mortgage rates and positive news on a recovering housing market."
Mr Donnell said that as sellers' expectations increase, they are likely to ramp their asking prices up further.
Housing minister Kris Hopkins said: "We're determined to pull out all the stops to both get Britain building and support aspiring home-owners who work hard and want to get on the property ladder.
"That's why we've already helped deliver over 330,000 new homes since 2010 while our plans to continue investing billions in our affordable homes programme will lead to the fastest rate of affordable housebuilding for two decades.
"Because the Help to Buy: Equity Loan scheme is helping demand with 15,000 reservations of newly-built homes in its first six months alone, leading house-builders are reporting plans to increase their building rates in response."