A SHORTAGE of properties coming on to the market could be helping to sustain the current high level of house price rises, says the National Association of Estate Agents. The market shows no sign of slowing and NAEA members across the country are reporting that the numbers of new instructions are failing to match demand, with house prices continuing to rise well ahead of the rate of inflation.

It is a situation being commented upon by estate agents as far apart as Cornwall, East Anglia, the East Midlands, the North West and the North East. Hugh Dunsmore-Hardy, NAEA chief executive, said: ''Our latest survey of members shows a traditional spring surge in housing market activity with estate agents struggling to keep up with demand.

"No-one seems to know why quality properties are in short supply at the moment - it may be that people who don't have an urgent need to move are holding on to see how much their property increases in value, but this is counter productive if they are planning to trade up, as the price of their next home will be rising even faster."

The survey revealed that, despite the shortage of new instructions, the average number of agreed sales during March was 33 per cent higher than it had been in the first two months of the year. The the numbers of property viewings was also up. Jim Atkins, NAEA president, said: "First time buyers are continuing to enter the market, accounting for around 38 per cent of buyers in March and that in itself is helping to keep the market buoyant. Mortgage rates are still low and the housing market remains healthy. A slow down in the rate of house price rises is still expected, but it is taking longer than most of us expected."