Rightmove’s house price index for September has revealed that the price of property coming to market this month reached a new national record, up 0.9% to £294,834.
Demand is being fuelled by cheap borrowing yet supply is limited by some home-owners’ reluctance to move, it said.
The average £2,550 rise is the largest amount seen in month of September since 2002, driven by price jump in family-home sectors (+1.2%) as owners of first-time-buyer properties see prices stall (-1.1%).
Meanwhile, the top 15 highest-priced counties all rose in price this month, by double the national average at 1.8%. These counties are all in the higher-priced southern regions which have all risen this month, driven by supply shortages with fewer home-owners selling.
At the same time, the lower-priced northern regions all fell, reducing would-be sellers’ ability to raise adequate funds to move and exacerbating supply shortages.
New seller numbers are down on same period last year in both the north (-4.9%) and the south (-7.1%).
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “The lack of properties coming on to the market is causing house prices to rise rapidly. Prices are currently increasing much faster than inflation, which makes it very hard for those who are looking to get on the housing ladder as the cost of a house is rising faster than they can save for a deposit.
“We have seen lots of initiatives designed to boost the demand side of the market, such as Help to Buy and the extension of Right to Buy to Housing Association properties. As a balance to this we need to see similar levels of support given to the supply side as well.
“The government has pledged to build 200,000 homes to help those under the age of 40, but we need to see houses being built that will suit all needs, from those looking for their first house to those looking for retirement properties.”