The latest data from haart estate agents reveals that the average London house price has increased by 1.4% in August to £248,580 from £245,017 in July.

The market has been particularly buoyant this month with sales transaction levels jumping up 20% since July when the World Cup and summer heat wave showed lower activity levels.

First-time buyer levels are at their highest in 12 months for the second month running, having risen 1% in August to 29% of the market share as their confidence remains high.

Paul Smith chief executive of haart said: "Despite the rise in interest rates at the beginning of the month, the selection of competitive mortgage deals currently available means that first-time buyers are still able to afford mortgage repayments."

"Confidence in their own financial security is high, under a backdrop of positive economic growth and high employment."

"There has also been an increase in the number of savvy first time buyers who are buying with their parents to give them a hand onto the first rung of the ladder. These high numbers of first time buyers are giving the housing market a much needed boost."

London-wide variations

The East of London saw the largest increase in price at 1.4% and one of the lowest percentage asking price discounts at 1.5%.

The South West has the highest average price at £286,413 but sellers received an average reduction of 3.2% on their asking price, showing that buyers are still price sensitive and overpriced properties are not selling.