UK house prices were higher year-on-year in October, the first annual rise for 19 months, the Nationwide has said.

According to Philip James of Strutt & Parker, the recent rises have been driven in part by the lack of properties on the market, coupled with the fact that there are more people actively looking to buy, creating an imbalance of supply and demand.

“There has been a noticeable flurry of activity over the past couple of months – an unprecedented 22 per cent of properties participating in the Strutt & Parker Open House Day last month have now sold, as those people committed to moving want to be in their new homes before Christmas,” said Mr James.

“Despite continuing concerns about the UK economy and employment, market sentiment remains positive and Strutt & Parker report transaction levels up 40 per cent in the last three months compared to 2008.”

Looking forward, Mr James sees no reason to believe continuing demand will not continue over the next few months with interest rates set to remain low and bank lending easing in some areas.

“With recent reports of mortgage approvals for house purchasers having increased to their highest levels in 18 months and the general view being that interest rates will stay low for some time, conditions for house buying right now are extremely favourable,” he added.

“The real issue is persuading vendors to bring their house on to the market – there are plenty of buyers out there but just not enough stock.”

A separate government property survey said house prices had risen by six per cent between May and September. The Department of Communities and Local Government also said UK house prices rose by 1.2 per cent in September.

Although prices are still 4.1 per cent lower than a year ago, this was the fourth monthly increase in a row and put the average house price at £199,303 across the country.