The overwhelming demand for properties continues to be greater than the supply, with five potential buyers chasing every house on the market, according to research.

An average of five house hunters were registered with members of the National Association of Estate Agents (NAEA) for every property they had on their books during October, the group said.

However, the average number of properties sold by each estate agent fell from 8.5 in September to 7.7 properties in October. The average number of potential buyers was also down, from 294 in September to 287 in October.

The figures support findings from other surveys which show that the rate at which new buyers are entering the market could be slowing.

The slowed rate of new buyers, along with more people putting properties up for sale, could help ease the supply and demand mis-match that has forced house prices to increase in recent months.

But there were few signs of more properties coming on to the market during October, with estate agents seeing their average stock levels dip to 57 per branch, the lowest level since July 2007 and down from 62 in September.

Gary Smith, president of the NAEA, said: "There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the UK economy in general.

"Many buyers are at the very beginning of the house buying process and this is creating a lack of properties in the short term.

"It is now up to the Government and the banks to do more to keep the momentum of market recovery going."

He called on the Government to extend the current stamp duty holiday on properties costing up to £175,000, which is due to finish at the end of the year, when the value of homes on which the tax is not charged drops back to £125,000.

First-time buyers accounted for 22% of sales agreed during October. This was down from 26% in September, but more than double the 10% in October 2008.

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