A lack of quality homes for sale continued to boost the property sector as house prices edged ahead by 0.2% during September, research has shown.
The market continued to recover more quickly in southern regions than northern ones, with the average home in England and Wales now selling at £156,100 - which is only 5.6% less than a year ago - according to property intelligence group Hometrack.
However, only a small part of the market witnessed the increase in house price during the past two months.
Prices remained the same for 84% of areas, while only 15% of postcode areas saw an increase during September.
Richard Donnell, Hometrack's director of research, said: "Continuing a trend of recent months, the headline growth masks what is essentially a London and South East story where house prices continue to be propped up by a shortage of quality homes for sale.
"Outside southern England the lack of supply is less pronounced and it is a modest pick up in sales and improved market sentiment that is supporting prices to the point where they have been trading sideways."
House prices in London and the South East rose by 0.4% and 0.3% respectively during September, while they edged ahead by 0.1% in the South West and West Midlands, but in all other regions prices remained unchanged.
The number of sales agreed across England and Wales rose by 2.5% during the month, but there was only a 0.1% rise in the number of people putting their homes up for sale.
Economists have attributed the recent stabilisation in the property market to the shortage of property on the market, which is providing some support to prices.
Mr Donnell said: "While a lack of housing for sale is providing a support to prices, talk of a general improvement in properties and equities is leading to increased market confidence.
"However, a fundamental imbalance still exists between supply and demand and question marks remain as to how long this situation can last and how resilient the market will be to changes in both levels of demand and sentiment.
"A general lack of supply is set to remain a feature of the housing market over the medium term, but as prices rise and sellers become more demanding, so the recent pick up in activity may well start to moderate over the autumn."
The research also showed a further pick up in the average time it takes for a property to sell, with this falling to 8.6 weeks, while sellers are now getting an average of 92.4% of their asking price, up from 91.5% in July.
But there was a further decline in the rate at which new buyers are registering with estate agents, with this rising by only 1.1%, down from a 4.6% jump in June and an 8.5% one in March.
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