Average UK house prices will rise 25% over the five years to the end of 2018.

According to Savills, prices will increase by 17% in the next three years alone.

The strongest five-year growth will occur in the south and east of England, with all of the regions outperfoming London over the next five years. Savills said the upper parts of the mainstream market will drive the next phase of recovery.

Savills also expects transaction levels in the market to increase by 27% over the five years. Help To Buy is likely to increase transaction levels by around 12% pa over its three-year lifespan, but transactions are expected to fall back once the scheme ends.

Savills’ head of UK residential research, Lucian Cook, said: “We see no evidence of an imminent housing bubble and think it an unlikely prospect. For a bubble to occur we would need to see five-year price rises of 35% to 40% and/or mortgage interest rates of around 7%, which seems improbable.

“On balance, an earnings-led price recovery remains the most likely outcome, with a continued squeeze on mortgaged owner occupation continuing to limit the recovery in market turnover and house price growth potential.”

Price growth in prime housing markets of central London is expected to exceed 23% over the next five years, on the assumption that there are no further changes to the taxation of high-value property.

Prime central London prices will rise by 3% in 2014 before falling 1% in 2015. However, the predominantly prime domestic markets, notably south-west London, are showing the strongest price growth.

“The gap between prime central London and its prime commuter markets has probably peaked and wealth has finally begun to flow out of the capital,” said Sophie Chick, residential market analyst at Savills. “We have already seen the predominantly domestic markets of outer prime London outperforming prime central London over the past year and anticipate that 2014 will be the year when the value gap between London and the lead suburbs and prime inner commuter belt finally begins to narrow. We expect 2014 to be the year of the super suburbs.”

The UK’s private rented stock is expected to grow by a further 1m households. Savills forecasts that average UK rents will rise by 21% over the next five years.

London’s mainstream market will see higher rent increases than any other region. Values are expected to increase by 25.8% over the next five years – marginally outpacing underlying house price growth, which is expected to total 24.4%.