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Buyer demand exceeds property supply by 5:1

This demand is pushing house prices up as the gap between asking and selling prices fell from 10.9% in September to 8.8% in October. This increase in demand did not translate into an increase in sales – which dropped from nine in September to eight in October.

Even so, a significant percentage of these sales were made by first-time buyers (22%) – more than double the number this time last year. It should also be remembered that September sales were at a slightly higher level than had been expected at the end of the summer holiday.

Gary Smith, President of the NAEA, said: "There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the UK economy in general.

"Many buyers are at the very beginning of the house buying process and this is creating a lack of properties in the short term. It is now up to the Government and the banks to do more to keep the momentum of market recovery going.

"A good place to start would be for the Government to extend the Stamp Duty holiday, which mainly affects first-time buyers, and is currently scheduled to end in December.

"The danger is that this short-sighted policy could precipitate an unwelcome pause in the housing market at the start of the New Year. We can only hope that common sense will prevail and that the Government will raise the lowest level at which Stamp Duty will apply to £175,000 for an indefinite period."

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