House prices
Low borrowing costs continue to increase demand for propertyGetty Images

House prices grew around 3.8% in the year to September, the biggest annual growth since May, according to Nationwide. The building society, however, expressed concerns about the ongoing issue of lacking supply for the market.

Adding to strong, market-wide concerns about the lack of significant supply to keep up with the increasing demand, the annual growth to the third quarter of 2015 was 3.7%. Chief economist at Nationwide, Robert Gardner, said that the data hinted that stabilisation might be close but he said that the building society is worried about the lack of sufficient construction activity.

"In recent months surveyors have reported historically low levels of properties for sale and increased new buyer enquiries," he added. "Therefore it is unsurprising that most surveyors expect a pick-up in house price growth in the months ahead."

Between August and September, the average house price rose 0.5%, the highest monthly growth since April, to £195,585. The low borrowing costs for a mortgage have strengthened demand over the last few years, despite the high costs and government promises, and now property experts are saying that not enough is being done to increase supply.

Although the house price growth cooled slightly in the summer, 2015 saw the biggest September increase in history, according to Rightmove. Some analysts are hopeful stabilisation is in sight but the continuing market tightening has made some economists worried about the coming months.

Howard Archer, chief economist at IHS Global Insight said that the think tank expects "house prices to see solid increases over the coming months amid firm activity".

"Given that house prices were soft in the latter months of 2014, this is likely to see annual house price inflation on the Nationwide's measure move higher over the coming months," he added.

Archer said that he thinks house prices will rise a staggering 7% in 2015 and an additional 6% in 2016, suggesting that stabilisation is still far from a reality. "A significant upside risk to these forecasts is currently coming from the shortage of houses on the market."