House prices rose by 0.5% month-on-month in November as surging demand from buyers continues to outstrip the supply of homes for sale, property analyst Hometrack has reported.
But in a sign that prices could be starting to run ahead of what buyers are willing to pay, the typical percentage of the asking price achieved dipped in November to 95%, from a six-year high of 95.2% recorded in October.
It is the first time in 11 months that the percentage of the asking price has fallen, although the latest figure also masks a new record high of 97.7% of asking prices being achieved in London.
Widened mortgage availability is said to be fuelling demand from aspiring property buyers, but experts say that a lack of houses to choose from is pushing prices up.
Hometrack said that while the number of new buyers registering with estate agents was up 10.2% over the last six months, the supply of homes for sale has dropped 0.6% over the same period.
Prices rose 3.8% year-on-year and on a month-on-month basis, increased in every region of England and Wales, although the performance of the market continues to vary across the country.
Properties are taking an average of eight-and-a-half weeks to sell, although in London this is just three-and-a-half weeks and in the North East it is 14 weeks.
Richard Donnell, director of research at Hometrack, said: "A widening gap between supply and demand continues to put upward pressure on house prices. Faster sales are eroding the stock of homes for sale, adding to the scarcity of housing."
Last week the Bank of England took the first step in applying the brakes to the property market by announcing it is refocusing a lending scheme towards helping small businesses borrow, which experts have warned could spell the beginning of the end for ultra-low mortgage rates.
A mortgage price war broke out after Funding for Lending was launched in August last year and the number on the market has since surged by 40%.
Demand from some would-be home buyers is expected to pick up further in the coming months because of the Government's Help to Buy scheme which was extended in October to offer state-backed loans to people with 5% deposits.
Mr Donnell said: "The announcement by the Bank of England to curtail Funding for Lending for mortgages is likely to result in mortgage rates drifting higher and reducing the buying power of households reliant on mortgages to fund a home purchase.
"It is important to note, however, that homeowners using a mortgage to buy a home account for just six in every 10 sales. Two-fifths of transactions are cash buyers and buy-to-let investors with a mortgage."
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