House prices are booming again thanks to renewed optimism and “scorching” mortgage deals.

Property values rose by two per cent last month, the biggest increase for more than two years, figures revealed yesterday.

The average price of a UK home is now £178,992 ­ and the upward trend is expected to continue.

Britain 's biggest mortgage lender, Halifax, said the increase was the largest monthly jump since April 2004.

Last night Haarts , Britain 's biggest independent estate agent, reported that the number of buyers was at its highest level for a year and a half.

House prices have now risen by 4.4 per cent during the past four months. The annual rate of house price inflation now stands at eight per cent, the highest for 13 months.

Experts predict the rise will eventually level out in the last part of the year, resulting in an eight per cent increase over the course of this year.

The latest figures come after gloomy predictions from economists who said the recent pick up was starting to run out of steam.