Ruth Lea, former director of the Centre for Policy Studies, said the recent growth in UK gross domestic product had been an encouraging, if tiny, move but the improvement in the housing market was more positive.
She added: “The recent recovery in the housing market is positive and still far from undesirable unsustainable boom conditions.
“UK house prices are almost back to the level of the last peak in quarter three of 2007, according to the Office for National Statistics.”
However Ms Lea said the situation was not the same for regions outside London as the ONS data suggested that, excluding the growth in London, prices were 5 per cent lower than in quarter three of 2007.
She added that there were some healthy signs of growth, as debt servicing costs and house price-to-earnings ratios were “quite stable” for the UK.
Ms Lea said: “We are not living in boom times. GDP is still more than 3 per cent down on Q1 2008 and, despite some comments to the contrary, activity in the housing market is still far from unsustainable boom conditions.
“If and when the housing market moves nearer to undesirable boom conditions, the governor has recently stated that the Bank of England will be ready to pop any emerging price bubbles.”
Andrew Montlake, director of London-based mortgage broker Coreco, said: “While there will be regional variations, brokers across the country I have spoken to are all experiencing higher enquiry levels that look set to continue throughout the summer.
“However it is not all about how cheap rates are, it is down to the ability of lenders to service increased demand and changes in criteria that enable more people to take advantage of low rates.”