Homes for sale lowest for years, says the Halifax
The number of properties on the market is at its lowest level for many years, according to the Halifax.
This shortage of homes for sale, coupled with demand from buyers, has led to prices rising at a faster rate than wages, the lender said.
Property prices rose by 8.6% over the year to the end of May, pushing the cost of the average home up to £196,067, its own lending data shows.
Yet prices dipped by 0.1% in May compared with April.
"The imbalance between supply and demand is likely to continue to push up house prices over the coming months," said Martin Ellis, housing economist at the Halifax.
"Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth."
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Jonathan Samuels, chief executive of Dragonfly Property Finance, said: "Unless supply improves materially, it is hard to see how prices will not continue to rise throughout 2015, albeit at a more moderate pace relative to last year."
The figures come the day after rival lender, the Nationwide, said that 38% of properties were sold to cash buyers.
The Nationwide said that a "gradual downward trend" in annual price growth, which had begun last summer, had resumed.