House prices rose in September, but the improvement is concentrated in London and the south-east and is being driven by a shortage of homes on the market, according to a report out today.

Hometrack, the housing market data group, said prices rose by 0.2% this month and for the second month in a row, after two years of falling or stagnant values. Rising prices have been recorded by all the main measures of the market, and its recovery has been one of the biggest surprises among a plethora of green shoots sprouting across the economy.

However, many observers are sceptical about whether prices can sustain this upward momentum – Nationwide has reported that, four months after prices stopped falling, they are rising at an annualised rate of nearly 14%.

Financial Times