PROPERTY prices are racing ahead at their fastest rate in more than three years with average values rocketing almost £13,000 in the past 12 months.

According to Britain’s ­biggest mortgage lender, prices were 6.9%t higher in October than a year earlier. This means a typical three-bedroom semi now costs £171,991 – a rise of £12,834.

The latest Halifax house price index showed October’s increase was the strongest since May 2010 and follows a 6.2% year-on-year upswing the previous month. A 0.7% month-on-month rise also marked the ninth consecutive increase.

And the surge is set to ­continue. One leading estate agent is predicting values across the country will rise by a quarter in the next five years, adding £43,000 to average prices. This would push the value of a typical house to £214,000.

In some areas, values could soar by even more, the research by Savills found.

Bournemouth, Brighton and Windsor are towns across the South expected to see average prices go up by almost a third by 2018.

Surging prices will also be seen in affluent parts of the South-west and the Midlands, such as Bristol, Bath and Solihull and, in eastern England, price increases of 31% are expected.

Lucian Cook, of Savills, said: “With strong positive sentiment, we expect prices to rise by 17% in the next three years alone.” Experts said demand was in part fuelled by the Government’s mortgage scheme Help To Buy. Ultra-low interest rates have also put mortgage payments for new borrowers at their most affordable for 14 years.