Price of houses up amid shortage

House prices rose by 0.5 per cent month-on-month in November as surging demand from buyers continues to outstrip the supply of homes for sale, property analyst Hometrack has reported.

But in a sign that prices could be starting to run ahead of what buyers are willing to pay, the typical percentage of the asking price achieved dipped in November to 95 per cent, from a six-year high of 95.2 per cent recorded in October.

It is the first time in 11 months that the percentage of the asking price has fallen, although the latest figure also masks a new record high of 97.7 per cent of asking prices being achieved in London.

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Widened mortgage availability is said to be fuelling demand from aspiring property buyers, but experts say that a lack of houses to choose from is pushing prices up.

Hometrack said that while the number of new buyers registering with estate agents was up 10.2 per cent over the last six months, the supply of homes for sale has dropped 0.6 per cent over the same period.

Prices rose 3.8 per cent year-on-year and on a month-on-month basis, increased in every region of England and Wales, although the performance of the market continues to vary across the country.

Prices were up 0.7 per cent month-on-month in London and the South East, by 0.5 per cent in Wales and the South West, by 0.4 per cent in East Anglia and the East Midlands, by 0.2 per cent in the West Midlands and Yorkshire and the Humber, and by 0.1 per cent in the North East and the North West.

Properties are taking an average of eight-and-a-half weeks to sell, although in London this is just three-and-a-half weeks and in the North East it is 14 weeks.