UK housing market
Rics said the number of new homes coming for sale on the UK housing market slumped in JanuaryReuters

January saw the lowest number of homes coming up for sale on the property market in 18 months, despite surging demand amid stimulus for the mortgage market.

The Royal Institute of Chartered Surveyors (Rics) said January was the worst month for new supply of houses for sale since July 2012.

However, price growth slowed slightly in the month. Rics recorded a house price balance of +53 for respondents to its poll of surveyors, down from +56 in December. Anything above 50 means a majority of surveyors reported rising house prices.

It was the fifth consecutive month of a +50 balance for house price growth, which is the longest run in over a decade for the monthly Rics report.

Demand is growing sharply in the housing market because of the Help to Buy scheme, which brings down borrowing costs for first time buyers through a package of support for consumers and lenders, and an emerging recovery in the UK economy.

"With more people now in a position to buy a home than at any point over the past few years, there are simply not enough properties to satisfy demand," said Peter Bolton King, global residential director for Rics.

"The upshot of this is increasing prices in many areas and this looks set to continue for the foreseeable future.

"That said, some of our members are have told us that, as the daffodils come out, more vendors could be looking to test the market as the traditional spring bounce begins to take effect.

"This can only be good news for a market that has seen supply struggle for a long, long time."

A day before the Rics report the Council of Mortgage Lenders revealed a sharp 37% year-on-year rise in lending to first-time home buyers during December.

Bank of England data shows the gross value of mortgage lending in the same month up 49% on the year before, at £16.8bn.

House building is also picking up. The volume of new homes registered with the National House Building Council (NHBC) hit 133,670 in 2013, up 28% on the year before and the most since 2007.

Government estimates put the annual volume of new homes needed in the UK at 290,500.