Agents say the latest Nationwide index showing a surprise rise in house prices does not change the fact that it is chiefly a lack of supply that is keeping values moving upwards.
Lucy Pendleton, from independent agency James Pendleton, says there is no doubt.
“The cause has to be lack of supply placing a squeeze on the number of homes coming to market helped in June by mortgage approvals slumping to a nine-month low with transactions levels also depressed” she says.
“First-time buyers may have also played their part in mopping up over the last few months, spying opportunities as prices dipped. Prices fell for three straight months between March and May but before that you would have to go back to June 2015 to find the previous monthly fall” she adds.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says the apparently good figures actually reveal a stock problem.
“We would have expected transactions in particular to be higher compared with last year bearing in mind how much quieter the market was 12 months ago following the introduction of the stamp duty surcharge” he says.
The agents were joined by Howard Archer, respected chief economic advisor to the EY Independent Treasury Economic Model Club, who says: “The downside for house prices should be limited markedly by the shortage of houses for sale. High employment and very low mortgage rates are also supportive. The June RICS survey showed new instructions to sell fell for a 16th month running, sending average stock levels on to a new low.”
The supply shortage is also blamed for the price rise by the Nationwide itself. The building society says prices increased by 0.3 per cent in July, the second month running there has been a rise.
"Constrained supply is likely to continue to provide support for house prices and, as a result, we continue to expect prices to rise by about 2.0 per cent over 2017 as a whole" says Robert Gardner, Nationwide's chief economist.
He says the average price of a house or flat in the UK is now £211,671. Over the last year, prices are up by 2.9 per cent, slightly lower than June's 3.1 per cent.
Last month the Royal Institution of Chartered Surveyors warned that agents were facing a 40-year low in terms of supply of homes on the market.