Diminishing levels of supply means the UK’s property marketplace is continuing to contract, according to the findings from Home.co.uk’s Asking Price Index for December.

As things stand, there are 47% fewer properties for sale than in December 2007. A dearth of stock for sale is at its worst in the regions where prices are growing the fastest, leading to a “vicious cycle of spiralling price hikes”.

In November roughly 12,000 (15%) fewer properties entered the marketplace compared to the same month a year before, further cementing the already well-established fall in stock levels. This shortage of supply has in turn forced overall annual price gains back up to 8.0%, despite the seasonal slowdown.

This is best highlighted in the East of England. Price rises there have been higher than London and the South East over the last six months, but the number of properties entering the market has dropped by 20% over the last year. Furthermore, there are 74% fewer properties entering the market in this region than there were in 2007, at the height of the last property boom.

Home.co.uk’s Index also found that the supply/demand imbalance has reduced the typical time on the market for properties in England and Wales. It is currently 204 days, which is six days less than 12 months ago.

In addition, the average asking price in England and Wales continues its steep upturn, now 26.5% higher than it was in December 2010.