House prices in Waltham Forest are continuing to surge, with property prices in the borough showing the third biggest rise in London.

Land Registry figures show prices have increased by 16 per cent in the last 12 months, with the average house price now standing at £292,137 - the highest figure for many years.

The owner of Estates17, based in Walthamstow Village, said properties in the borough had been undervalued for years.

Neil Collins, 37, said: “House prices are higher than the average price given by Land Registry. We’re seeing one bedroom apartments sell for £275,000 and two bedroom houses sell for £350,000 to £400,000.

"The housing market is twice as strong as I’ve ever known throughout my 12 year career of working in real estate within Waltham Forest.

"For many years house prices in the borough had been under-valued in relation to the good transport links we have and our position with being so close to central London and Epping Forest.

"The growth is incredible and to many people living outside the borough, it still looks cheap. I can’t afford to live in Waltham Forest and I sympathise because I know local people are priced out of living in this borough."

Director Simon Rose of Roselins in Station Road, Chingford, said: "Waltham Forest is a great place to live with excellent connections to central London and the M25.

"Lenders generally have been more keen to lend in the last 12 months and many residents with the borough are commuters to Central London whereby higher incomes are achieved."

He also added first-time buyers are stimulating the growth.

"First-time buyers are back in the game and this has positive implications all the way up the housing market," said Mr Rose.

Marc McLiveney, manager of Spencers in High Road, Leyton, described the borough as an 'undiscovered gem'.

He said: "House prices have been under-valued for years. Waltham Forest is a perfect haven for families as it brings both the benefit of being close to Epping Forest and central London.

"People are starting to realise that Waltham Forest is an undiscovered gem and if you look at similar types of properties in somewhere like Hackney, compared to the same in Waltham Forest, it's a bargain and you could save yourself close to £100,000.

But Mr McLiveney admitted prices had risen beyond expectation.

He added: "An Abraham-style two-bedroom ground floor flat in Francis Road sold last year for £210,00.

"We have recently sold one of the exact same style for £300,000.

"Our search database of the area is showing 375 registered applicatants looking for properties in the £250,000 range and people are paying way beyond the asking price."

Average house prices in London passed £400,000 for the first time last month.

In December alone, the capital’s property values rose by 2.6 per cent, which is the equivalent to an average of £10,000 in real terms.

Hackney saw the highest annual rise of 17.2 per cent, followed by Wandsworth with 16.4 per cent.

Repossessions in London have fallen by a third since October 2012.