Prices grew by 0.7 per cent in February, with an average of 9 per cent more buyers in the market than sellers helping to inflate prices further in 42 per cent of the UK.
Hometrack also claimed the problem was being compounded by potential sellers being put off from entering the market due to a lack of available, apposite property, with 31 per cent of estate agents questioned citing this difficulty.
Richard Donnell, director of research at Hometrack, commented: “The reality is that house prices are being set by a narrowing spectrum of buyers, chasing a limited amount of supply. In the absence of any external shock to demand and the apparent willingness by purchasers to pay what is necessary to access the market, house prices look set to increase further over future months.”
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Hometrack said supply problems were more acute in London and the South East, with the average time needed to sell a property in the capital down to 2.5 weeks in February, compared with over seven weeks in the East Midlands, Wales, Yorkshire and Humberside.
Estate agents believed the threat of higher rates was the main factor behind supply issues, while Home Information Packs and Stamp Duty played minor roles.
Daniel Clayden, director at Clayden Associates, said: “Lack of supply has been compounded by buy-to-let (BTL) as landlords are more able to go for the prime properties which others struggle to afford. BTL is the only factor keeping prices up. If it wasn’t for this, we probably would have seen a market correction.”
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