Average UK property prices have increased 12% annually to a new high of £215,749 with seven buyers chasing every property, according to the latest Sequence index report.

The situation in London is even stronger with property prices up 23% annually to £458,581 but prices are flat month on month. This is on par with other indices which have been indicating that growth is slowing in London.

The data also shows that London buyer registrations are up 34% annually while supply only increased by 11% and there are 14 buyers in London registering for every new property instruction.

Nationwide new buyer registrations are up 29% annually but the supply of homes coming onto the market has increased by just 5% annually.

Mortgage applications have decreased 14% annually and 6% month on month with the firm, owners of 300 branches of estate agents across the country including Barnard Marcus, William H Brown and Fox & Sons, saying that the new MMR mortgage rules are cooling the market.

Overall UK prices increased by 1% in May compared with April but London recorded growth of 0%. In terms of sales, nationwide they increased by 17% year on year but fell 2% month on month while in London sales have increased 19% compared with May 2013 but fell 3% month on month.

‘Prices continue to be bolstered by rising levels of buyer demand, up 29% annually, which is around six times the rate of supply, with new instructions up just 5%,’ said David Plumtree, chief executive at Sequence.

‘Going forward, a reduction of buyer demand and stabilisation of house price growth is unlikely to happen until later this year, so we urge sellers to make hay while the sun shines by taking advantage of the captive audience of buyers now before the opportunity diminishes. There are now close to seven buyers chasing every new instruction and it is this competition which is keeping prices high and sales transactions rising, up 17% annually,’ he explained.

‘While house prices remain robust, up 12% annually across the UK and 1% on month, the mortgage market is shifting and we are seeing a cooling off of the number of mortgage applications, down 14% annually, due to the new Mortgage Market Review (MMR) recommendations,’ he pointed out.

‘When mortgage products become less attractive and interest rates eventually rise, we may see an impact on house prices as buyers, especially first time buyers, begin to struggle keeping up with rising costs of buying a home,’ he added.