Prices have risen faster than at any time in the last two years, according to a survey by the Royal Institution of Chartered Surveyors (RICS).
For June, 28 per cent of surveyors reported increases in prices rather than falls. By July, the figure had risen to 31 per cent.
There are worries that the housing market could contribute to higher levels of inflation.In response to these, the Bank of England earlier this month raised interest rates.
RICS noted that the last two months had seen falls in the supply of new property, while increased sales led to price rises. The survey also found that estate agents remain optimistic over the short-term.