The average property price in the UK has risen by 12 per cent

The average property price in the UK has risen by 12 per cent annually to a new high of £215,749, despite the mortgage market tightening, according to new figures.

New buyer registrations increased by 29 per cent, while the supply of homes rose by only five per cent, leaving seven per cent of buyers chasing every new property on the market.

London prices have continued to soar, up 23 per cent annually to £458,581, with buyer registrations hitting 34 per cent annually but supply only increasing by 11 per cent, meaning 14 buyers chase every new property instruction.

While there has been substantial price growth London buyers remain undeterred and sales transactions remain at a two year high for this time of year, according to the Sequence National Housing Market Index.

Mortgage applications have decreased by 14 per cent annually, however, and 6 per cent and while applications are still higher than they were two years ago, there has been a reduction in applications a cooling which could be a combination of MMR and rising house prices.

After a spring market surge UK sales transactions are down two per cent in May, however, the strength of the market is clear when looking at the annual rate of growth, where sales transactions are up 17 per cent.

In spite of rising prices and a tightening of mortgage lending criteria the level of sales still remains very high.

David Plumtree, Chief Executive at Sequence, which owns Barnard Marcus, commented on the figures:

“Prices continue to be bolstered by rising levels of buyer demand. Going forward, a reduction of buyer demand and stabilisation of house price growth is unlikely to happen until later this year, so we urge sellers to make hay while the sun shines by taking advantage of the captive audience of buyers now before the opportunity diminishes.”

Shereen Ali, 16th June 2014