HOUSE prices in the South East accelerated for the sixth consecutive month in September, rising at their fastest pace since December 1999, according to the Royal Institution of Chartered Surveyors (RICS).

A booming City economy has seen the South East leading the price increases outside of London, as the result of a ripple effect from the capital in the wake of rising investor confidence.

The stock market has risen to its highest level since May and estate agents report that 'gazumping' has come back into fashion.

Trevor Hines, director of RICS South East, said: "Greater economic activity has created a ripple effect in house prices across the country with our area leading the way.

"With stocks of property low and buyer enquiries on the increase, sellers remain in poll position to benefit in the short term.

"Continuing house price rises will make it difficult for the Bank of England to leave the base interest rate level at 4.75 percent, unless the economy shows unexpected weakness.

"With affordability conditions for first-time buyers worsening, as price rises outstrip wages, higher interest rates will not help. However, a strong economy means that the housing market should see a soft landing in 2007."