Demand for houses still running ahead of supply

House proces have risen again this month as demand continues to outstrip supply, according to the latest research from the property website Rightmove.co.uk.

National average asking prices rose by 2.3 per cent in September, pushing the average house price through £150,000 and setting the annual rate at 22.2 per cent.

"The shortage of properties coming on to the market in many areas means that it is still a seller's market, particularly in the lower and middle price brackets. This shortage and continuing demand are resulting in renewed increases in asking prices overall," Rightmove's Miles Shipside said.

The findings support the latest survey from the Nationwide Building Society, which showed prices rising at their highest rate since 1989, but contradict the latest Halifax survey which reported a slight slowdown in annual inflation from 20.8 to 18.8 per cent.

Rightmove said the number of properties on the market declined "steadily" over the first half of this year although that trend reversed in the Summer months, coinciding with a cooling in asking prices.

"It's an intriguing situation, with two house price indexes showing the market grinding to a halt, and two showing that the train still has a good head of steam," said John Wriglesworth, an independent housing commentator.

He said that property markets should remain "well supported" thanks to "low interest rates, good affordability and low unemployment".

At the end of last month, Nationwide said house prices surged at their fastest rate for 13 years and said it saw no sign of demand for homes weakening. The price of the average home jumped by 2.5 per cent in August, for the second month in a row, to £110,890, a gain of £67 for every day of the month.

Halifax contradicted that just days later, reporting that prices rose in August at their slowest rate for 10 months. It said house prices rose just 0.2 per cent, after jumping 1.8 per cent in July, bringing the annual rise down to 18.8 per cent.