Housing shortage keeps house prices in August at their strongest since 2007

August's traditional decline in house prices has been much slower this month than in previous years thanks to a shortage of houses coming onto the market.

In a stark sign of the extent of Britain's housing crisis, house prices were down just 0.8% in August, data from property website Rightmove revealed.

The average price fall in August has been 0.5% between 2008 and 2014.

New sellers were down 8% year-on-year.

Sellers were likely to have been deterred by a lack of available homes to buy, the cost of moving and a dearth of affordable housing.

Britain’s housing crisis has seen first-time buyers unable to get on the property ladder due to a lack of homes at the bottom end of the market, and prices have soared in prime areas – such as central London – where demand far outweighs supply.

David Cameron has vowed to deliver 200,000 new starter homes, which will be sold to first-time buyers under 40 at a discounted rate.

The Labour government of 2007 set a target of 240,000 new homes by 2016, but a cocktail of a rigorous recession, tough planning laws and a lack of available land has left the market short and sent prices spiralling.

Rightmove director Miles Shipside said: “While new seller asking prices have been muted by the traditional summer holiday property slowdown, the underlying shortage of property coming to market compared to buyer demand has helped to deliver the strongest August price performance since before the credit crunch.

“Buyers can normally pick up some bargains in August as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively.

“At 0.8% down on the previous month, this is the least generous that sellers have had to be for eight years and a clear sign of upwards price pressure in the pipeline.”