According to the Nationwide building society, house prices have recently surged taking the average price for a home in the UK to £170,514.
The biggest annual rise in the property market happened in July which saw a 3.9% increase. There hasn’t been a peak in the price of property like this since 2012.
Robert Gardner, Nationwide's chief economist, said: "A number of factors appear to be contributing to the recent upturn in house price growth. Consumer confidence has increased significantly in recent months, thanks to further modest gains in employment and signs that the UK economy is finally gathering momentum.
“An improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures such as the Funding for Lending and Help to Buy schemes, is also enabling more people to take their first steps into the property market."
With 45% of home purchase loans being taken out by first time buyers, the funding for lending scheme is currently offering incentives to banks and building societies to lend more in return for discounted loans, and has been credited with improving mortgage availability and reducing rates.
Chancellor George Osborne also launched Help to Buy in April, which allows people to buy a property with a 5% deposit. The government lends buyers 20% of the value of a new home worth up to £600,000, interest-free for five years.
The data comes after Bank of England governor Mark Carney warned earlier this week over the risks of another housing bubble amid fears that Government stimulus measures are stoking unsustainable price rises.
He said the Bank is "acutely aware" of the potential threats and said action will be taken to clamp down on mortgage lending if needed. The Bank could step in and ask lenders to restrict borrowing terms or even force banks to hold more cash on their balance sheets to dampen down an overheated property market.
There are concerns that these schemes will push up house prices and borrowing levels, rather than spurring on more new home construction.
Mr Gardner said: "While there have been encouraging signs that house building is starting to recover, construction is still running well below what is likely to be required to keep up with demand.
"The risk is that if demand continues to run ahead of supply affordability may become stretched."
College and County will be keeping you updated on the situation regarding the surge in house prices and how it affects the property market.