House prices up 0.5pc

Demand for housing grew by 10.2% over the last six months while the supply of homes for sale declined by -0.6%.

The greatest imbalance and highest price increases was in London and the South East where prices were up by 4.8% and 3.2% in six months.

In contrast the balance is smaller in northern regions where price growth has been less than 0.5% over the same period.

Richard Donnell, director of research at Hometrack - the residential property analysts - said: “A widening gap between supply and demand continues to put upward pressure on house prices.

“Average prices increased by 0.5% in November on the back of 3% increase in demand and a 3.5% contraction in supply.

“Faster sales rates are eroding the stock of homes for sale adding to the scarcity of housing.”

Improving market sentiment, largely driven by publicity around Help to Buy, and record low mortgage rates have underpinned a sustained increase in demand over the last 6 months.

“The survey results from the last six months show that demand for housing has grown by 10.2% while supply has, on average, fallen by 0.6%.

“There are wide regional variations in the relative balance between supply and demand and this impacts the extent and scale of house price growth.

“London and the South East have the greatest supply/demand mismatch and have seen house prices grow by 4.8% and 3.2% respectively. In contrast northern regions have negligible imbalance and price rises have been less than 0.5% over the last six months.

“While the scale of house price growth varies, the overall trend is that a growing number of markets are seeing a general trend of rising prices.

“In November 46% of postcodes saw prices rise, the highest level for over nine years (July 2004).”

However Donnell warned: “Much of the growth outside London remains muted and far from what could be described as a ‘housing bubble’.”