London drives annual house price rise

UK house prices rose by 5.4% in the 12 months to November with increases of 5.6% in England, 5.4% in Wales, 2.5% in Scotland and 3.3% in Northern Ireland.

On a regional basis annual house price increases in England were driven by rises in London (11.6%), the South East (4.5%) and the West Midlands (4.4%).

Alex Gosling, director at online estate agents, said: "Buyers are definitely showing more confidence to purchase, but there is also a little fear as well that if they don't take the plunge now they will be left behind as a lack of supply and buyer demand drives prices higher and out of reach.

"This is certainly the case in London where properties in many areas are being snapped up within hours of being marketed.”

Gosling warned that many Londoners were being forced to pay thousands of pounds over the asking price due to such stiff competition.

Prices paid by first-time buyers were 6.4% higher on average in November 2013 than the year before, while existing owners paid 5.1% more in the same period.

Stephen Smith, director Mortgage Club and Housing at Legal & General said: “The government does need to continue considering how to sustain the housing market without sparking a bubble in the south while simultaneously preventing other parts of the country falling too far behind.

“What is abundantly clear though is that the UK desperately needs an increased supply of houses to meet the renewed demand the upturn has brought about as this shows no sign of abating.”