House prices stormed upwards by 2.4 per cent month-on-month in February, according to Halifax bank.
Economists polled by Reuters had expected an increase of 0.7 per cent.
Year-on-year, prices rose 7.9 per cent in the three months to February, and 2.1 per cent on the previous three months.
The jump takes the average house price to within a whisker of £180,000, at £179,972. That is, however, still near-on 10 per cent below the August 2007 peak.
Nicolas Ayre, managing director of Home Fusion, the home buying agency, says lack of supply is continuing to bump up prices: "There are some concerns about buyers paying anything for a property owing to the lack of stock and a certain desperation."
He adds, though, that the market as a whole is not, at least for the time being, running away with itself.
Howard Archer of IHS Global Insight says that, outside the capital, house prices aren’t yet a concern. But, they are something that “needs to be monitored closely”, because recent data keeps indicating the strength of the market, and buyer interest is growing in all regions.
IHS expects house prices to rise by eight per cent this year, with the whole country seeing gains. Today’s data suggests that’s a conservative forecast, though.
Archer reiterated IHS’s prediction that the Bank of England could well take steps to dampen the housing market, recommending to government that it cuts its Help to Buy scheme so it applies only to houses priced at £300,000 or less (the limit’s currently £600,000).
Ayre also emphasises the need for the right response, stressing the importance of rising interest rates. We don't need to worry right now, but we - and decision makers alike - should be cautious.
The housing market is off the ventilator and is breathing unassisted but it still needs oxygen. The market is not functioning normally because interest rates have had to remain at 0.5 per cent for five years.
It is clear that this has been a long recovery and it is not over yet. When interest rates do start to rise, it will cause a real problem for those heavily indebted homeowners, and will need to be handled with care.