'Seller's market' drives house prices

The shortage of housing stock is most noticeable in London

House prices rose at their highest rate for 18 months during October because of dwindling sales stocks, according to property website Rightmove.

The company said the monthly increase of 3.3% came about as prices were driven up because of a shortage of properties for sale.

The annual rate rose from 9.1% in September to 9.8% in October, the first time the figure has risen in 10 months.

Miles Shipside, commercial director of Rightmove, said: "There has been a clear upsurge in activity, with many first-time buyers and investors back looking for properties, particularly at the cheaper end of the market."

Rightmove said the current market was in favour of the seller, with 35,000 more homes coming off the market than on to it during October.

Northern gains

London had been the hardest hit by a house price slowdown in recent months.

However with 6,300 more properties coming off the market in the capital there was a monthly 4.5% increase in asking prices.

Annual property inflation in the capital now stands at 2.5%.

Rightmove said the greatest year-on-year rises have been experienced in the North of England where house prices have soared by 24.4% in the past 12 months.

The North West, West Midlands and Wales have all also experienced annual rises of over 20%.

Elsewhere, prices have risen by 7% in the South East, 11.9% in the South West, and 13.4% in East Anglia.

The Rightmove report will go a long way towards calming the nerves of homeowners who have seen the rate of house price inflation slow dramatically in recent months.

Recent surveys from the Halifax, Nationwide and Royal Institution of Chartered Surveyors (RICS) have all shown house prices increases slowing to a crawl from a sprint, sparking fears of an possible collapse in values.

The Rightmove report is compiled on the asking prices being marketed by 3,700 estate agents.