There are fewer properties on sale and more people looking, with investors snatching up an increased share of the market, according to the latest RICS survey, published this month.
The percentage of investors buying houses rose from 8% in October 2000 to 13% in August 2003, suggesting that first time buyers could be being squeezed out by buy-to-let purchasers.
The survey also found that the number of properties on the market fell in August, marking the third consecutive monthly decline and causing concern among buyers that they might not be able to find exactly the sort of property they want.
The contraction of property availability probably depends on the fact that most vendors do not appear to be in a hurry to sell due to the resilience of the market, despite fear of a crash earlier this year.
A slight rise in prices was also detected by the survey – the first increase since January – particularly in the northern regions, and most of all in the north west.
RICS Housing Spokesman Jeremy Leaf said: ‘The summer months are traditionally quiet, so we expect to see an increase in activity as we come into the autumn.
‘The national picture is one of quite modest house price rises for the first time this year, although the south is still trailing behind the north.’