Home.co.uk’s latest Asking Price Index has shown that house prices in the East of England have surged thanks to a chronic lack of supply, with the region now overtaking the traditional strongholds of London and the South East when it comes to house price growth.

As expected, demand in these three regions remains exceptionally high while supply badly struggles to keep up.

Prices have risen strongly throughout England and Wales, with this trend set to continue as interest rates remain on hold until at least 2017.

The amount of property stock for sale is still very low. This is expected to be the main driver of house price growth in 2016, with the other main component being ultra-low interest rates of 0.5%. 

The lack of property coming to the market continues to push prices up. Supply is, in fact, down by 8% compared to even a year ago. The hardest-hit areas when it comes to the property stock drought are the West Midlands and the East of England.

The situation, however, is quite different in the North and Wales, where there have only been small reductions in the number of properties for sale. As a result, supply remains relatively buoyant and there has been very little (if any) upward movement in house price growth.

Altogether, the average asking price in England and Wales is now 8.1% higher tha 12 months ago. This figure only looks set to rise as a supply shortage becomes an issue in more regions.