The strong year-on-year August growth has pushed the UK’s average property value close to the 2007 peak of £181,000.

Each region across the UK reported an annual rise. London and the South East led the way with annual rises of 21.6% and 11.6% respectively lifting the average house price in those regions to £467,000 and £238,000.

Homes in the South West rose in value by 5.8% to £184,000. West Midlands property owners saw price increases of 4.4% giving them an average value of £135,500 while homes in Wales rose by 3.4% to £119,000. The North East saw the slowest annual price rise of 3%.

James Hall, director of London estate agent Fishneedwater, said: “The appreciating pound has yet to deter cash buyers from abroad, who continue to target the capital’s property as a secure long-term investment.

“Elsewhere in the country, there is a greater sense of sanity, with steady rates of growth now spreading even to the areas worst affected by the crash.”

Completed house sales grew by 11% in June to 73,158 compared to the previous year while repossessions decreased by 36% year-on-year in June to 794.

The number of properties sold in England and Wales for over £1m in June 2014 increased by 34% to 1,135 from 848 in June 2013.

The swell of properties in the high end price bracket, largely found in London, will add to wealthy homeowners’ fears they could end up paying on average £1,000 a month under Labour’s proposed Mansion Tax.

A report from the FT this week said that Labour plans to tax homes worth more than £2m in a bid to raise £1.2bn.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “While there may be a slowdown in the £2m-plus market regarding concerns about a mansion tax if Labour win the general election, the mainstream market motors along with borrowers taking advantage of cheap mortgage rates and an improving economy, which brings better job security.”