According to agent Savills price growth is being driven by the south east, but sentiment is also improving across the country.

There are now early signs of life in key urban markets such as Manchester and Birmingham that have remained dormant since 2008.

The rises come as latest figures from the ONS show that housing output in the last quarter of 2013 exceeded commercial new building for the first time in decades.

Greenfield development land prices grew by 3% in the final quarter of 2013, the highest rate of quarterly growth since 2010, according to the Savills residential development land index, to finish the year up 6.5%.

Urban land values grew by a similar rate over the same period.

Renewed housing market confidence pushed up the value of large permissioned sites outperforming smaller one and five acre sites last year.

The value of 30-acre permissioned sites increased by 7.5% in 2013, driven by a last quarter rise of 3.7%.

Smaller one and five acre sites rose by 5.8% and 6.4% respectively.

Larger permissioned sites in better markets have been targeted by house builders and developers looking to replenish their supply pipeline, in order to continue building out at the higher rates that are now being achieved.

“Improved confidence in the housing market is playing out in the land markets, with value growth driven by a strong demand for land,” said Jim Ward, Savills director of residential research.

“Acquisitive house builders are now channelling debt and equity into longer term sites to secure pipeline, in a clear acknowledgement that sales rates and therefore optimum build rates have bottomed out in all but the most challenged locations.

“This increased demand, in a market where supply remains constrained, means that land values are expected to continue their upwards trajectory.

“This accentuates the need for the volume of land coming through the reformed planning system to continue increasing at the rates we have seen during the last 18 months.”