House prices reached a record high of £208,286 in December after leaping by 9.5pc during 2015, according to Halifax. December's 9.5pc year-on-year rise was also an improvement on the 9pc annual increase recorded in November. Across the UK, average property prices ticked up 1.7pc between November and December.
But there are signs that the pace of growth is softening slightly. ADVERTISING The quarterly growth rate, which tends to be a good indicator of underlying trends, has remained below 2pc for two periods in a row, Halifax said. Martin Ellis, a housing economist at Halifax, said the latest figures indicate that the property market might be softening.
However, he added: "There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale.
“This situation is unlikely to change significantly in the short term, resulting in continuing upward pressure on prices,” said Halifax.
Halifax pointed to recent figures from the Royal Institution of Chartered Surveyors (Rics), showing that the supply of homes on the market is at a record low.
Lack of supply huge issue
Jeremy Leaf, a former chairman of Rics, said: "The lack of supply is a huge issue that will dominate the market in coming months, despite government plans to encourage smaller house builders, and will also contribute to house-price growth over coming months.
"While the government is pledging to build more homes, there is no room for complacency.
"While everyone agrees that more building is required, the question is whether there is enough capacity in the market - builders, materials etc - to get the job done."
Meanwhile, data from HM Revenue and Customs (HMRC) shows home sales between September and November were 5.2pc higher than in the same three months a year earlier.
A "bumper backlog" of nearly half a million homes across England are still waiting to be built after being given planning permission, according to separate analysis released by the Local Government Association (LGA).
A study commissioned by the LGA found that 475,647 homes were yet to be built across England in the financial year 2014/15 after being given planning permission.
But the Government said that work has already started on more than half of these homes.