Mortgage rebates and relaxed lending could see house prices rise by more than 10 per cent in some areasGETTY IMAGES

House prices will rise sharply next year as the government’s mortgage rebate scheme coupled with relaxed Central Bank lending rules fuel further inflation across the country, according to analysts.

Figures released by the Central Statistics Office (CSO) showed that house prices were 7.1 per cent higher in October than in the same month last year. On a monthly basis, prices nationally edged up by 0.8 per cent.

The average cost of a house purchased in the 12 months to August was €235,750. The average cost of a house in Dublin was €386,650 while the comparative average cost in the border region, the cheapest in the country, was less than a third of the price at €112,580.

The rate of increase in property prices was slightly…