A total of 126,000 mortgages were approved for house purchases in September, a two-and-a-half year high, according to official data released by the Bank of England (BOE).

BOE also reveals that total net lending on homes increased £8.9bn in September, representing an 11.2% increase on the same time last year.

David Stubbs, senior economist at the Royal Institution of Chartered Surveyors (RICS), says: "The figures show the housing market remains in excellent health, with a strong economy and investor activity fuelling strong demand for housing."

The supply of residential property coming on to the market has not however, risen in line with mortgage approvals. Stubbs adds: "Mortgage approvals may be up, but new property coming on to the market is the lowest in four years reducing supply.
"Market conditions look set to tighten going forward causing further price rises."