Housing supply slowly picking up pace: Hometrack

However, the research showed that demand for housing also accelerated by 17 per cent in February, the highest monthly increase for two years.

Richard Donnell, director of research at Hometrack, said that the increase in supply was “welcome news” but added that it was starting “from a low base”.

He added: “The supply of homes will need to expand much further to narrow the gap between supply and demand to ease the upward pressure on prices.”

The survey also revealed that more regions experienced house price rises last month than at any other time in the past decade. Just over half, 51 per cent, recorded house price rises and the average increase of 0.7 per cent was the highest seen since April 2007.

But that average figure was pushed up by London and the South East, which saw the biggest gains of 1.1 per cent and 0.9 per cent respectively. The rest of the country saw below-average price rises.

Mr Donnell said that price rises would only ease if there was a “sustained increase” in supply or if demand were to weaken, an “unlikely” scenario in the face of low mortgage rates.

Jane King, principal of London-based Ash Ridge Asset Management, said: “In my patch of London and the South East, properties are in shorter supply than ever, and I’m coming across more and more clients with nothing to meet their current budgets.”

Table: National Housing Survey, December to February

Source: Hometrack