A sharp drop in new property supply is forcing house prices ever higher with the average asking price now just a whisker away from £300,000.
The number of new sellers dropped by 10.6% in the year to June, according to analysis by Rightmove, published today.
The property portal reported a 22% leap in the number of visits and enquiries to agents over the same period.
The gap between demand and supply is at its largest in the first-time buyer sector, hitting people's hopes of getting on the property ladder.
The number of enquiries per property for two bedrooms or fewer is 24% higher than for larger properties of three bedrooms or more.
Rightmove's figures saw asking prices hit a record high of £294,542 in June.
Miles Shipside, Rightmove director and housing market analyst, said: “Another month, and another record high in the price of property coming to market.”
But the monthly increase was just 0.1%, or £191 per property, which Shipside pinned on growing affordability problems and the seasonal summer slowdown, which saw prices fall 0.6% in June last year.
He said: “Given the widely acknowledged supply crisis and a sharp drop in new seller numbers, it is somewhat surprising that the rate of increase has slowed to such an extent.”
The biggest fall in fresh supply is in the typical first-time buyer sector with two bedrooms or fewer.
Competition is tight, with first-time buyers, downsizers and buy-to-let investors all looking for this type of property.
Shipside said: “The quandary for developers is how to deliver more homes into this sector when building larger homes may deliver greater profit margins and attract buyers with less stretched affordability."
He said the forthcoming extra tax burdens on buy-to-let investors may help to tip the balance in favour of first-time buyers, but the consequent drop in rental property supply could push up rents.
Trevor Binch, managing director of estate agency Merrick Binch in Coventry, said: “We’re finding that any properties on the market with us at under £150,000 – so your typical two-beds or some three-bed terraced – are selling immediately.
“There are a lot of investors snapping up these types of properties, and this, coupled with the fact that a lot of sellers aren’t coming to market, is making the supply shortage worse.”