Concern over a possible housing bubble has been further fuelled by a new report by The Centre for Economics and Business Research (CEBR), which predicts the average UK house price will hit £278,000 by 2018. The prediction for London is even more surprising: CEBR believes a property in the capital will average £566,000 by 2018 (a rise of 43.5 per cent).

The next phase of the government’s Help to Buy scheme has been brought forward by three months, following the initiative’s popularity among first time buyers and property investors.

The national mortgage approval rate in August hit its highest levels for five and half years. UK estate agent Haart believes housing transactions will increase by 15% over the coming 12 months.

While concern over  a housing bubble increases in some quarters, CEBR’s economist Dan Solomon believes the Help to Buy scheme has given the property market a “shot in the arm” and said that talk of a housing bubble is “premature”.

The CEBR house price predictions are based on data from the Office for National Statistics.

Business secretary Vince Cable is one of the more outspoken and high profile critics of the Help to Buy scheme, and has suggested that it might create a housing bubble. He has also questioned whether the second phase should take place at all.

Outside political circles, heavy-weight industry figures have also voiced concern about the next phase of Help to Buy. Matt Pointon of Capital Economics said they believe there is “his still a risk of a correction in house prices, earnings are still falling and house prices are quite pricey as it is."

But as many have become aware, activity in the housing market is picking up, and the success of recent initiatives in boosting mortgage availability and property sales.