Grainger Trust, the country's largest quoted residential property investor, said on Thursday it had received an approach that could lead to an offer for the company, sending its shares up 10 percent.
No terms have been indicated nor details provided, Grainger said in a statement. A spokesman declined further comment.
The Financial Times reported that Grainger shares had risen 4.9 percent, or 26 pence, on Wednesday after talk it might be the subject of a 700 pence per share bid.
At 08:00 GMT (9 a.m. British time), Grainger Trust shares were up 10.4 percent at 617 pence, just below an earlier record high at 626.5 pence and valuing the company at 800 million pounds.
News of the approach came after Nationwide Building Society said on Thursday that house prices rose 1.3 percent in September for a year on year rise of 8.2 percent, the fastest rate since February 2005.
Nationwide said buy to let landlord demand was particularly strong and looked set to support the market for some time to come, especially amid strong demand for rented accommodation from migrant workers.
Grainger owns over 12,000 properties in the country, with 60 percent in London and the southeast, according to its Web site.