There has been a rise in both house prices and the buy-to-let property market.

House prices are continuing to rise – at their highest since December 2006 – with London leading the price upturn (the highest for 13 years), according to the Royal Institution of Chartered Surveyors (RICS).

The rise has occurred in spite of the increase in new house instructions – 15% of surveyors had reported such an increase, compared with 5% in September.

Jeremy Leaf, RICS Surveyor, said: “Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further price gains in the near term. Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders.”

Meanwhile, the number of properties bought as buy-to-lets have also increased. According to the Council of Mortgage Lenders (CML), the UK buy-to-let market grew in the third quarter of 2009 – the first growth in two years – and buy-to-lets currently represent around 11% of the mortgage market.

Both the increase in house prices and the rise in buy-to-lets have been attributed to the current economic situation. Cheap money, where borrowing costs are low, has meant that more people can afford to put in offers for properties.

Michael Coogan, CML Director General, said: “At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.”