The prices of houses in the UK has experienced it's sharpest increase in more than two years. The shortage of properties up for sale has caused the selling prices to boost higher than has been seen since April 2007.

Market research has revealed that asking prices increased by 3.2% during January 2010 and the low numbers of people selling their homes has caused estate agents to compete in a way not seen for some time, which is great news for anyone trying to sell a house, as the estate agents commissions terms in some areas are at an all time low.

The shortage of property for sale has had the effect of increasing the average cost of a home up to £229,398, which is 6.1% higher than the same time last year. Having said that, some pockets of the UK are affected differently, with London house prices up by 5% on the month, which has given a record high of £427,987.

Given the fragile nature of the UK economy, industry experts are warning that the pace of the increase is unsustainable due to the limited amount of mortgage finance available due to the ongoing effects still be felt from the global melt down in the finance markets.

Figures recently released show a steady increase in the number of homes for sale in the UK, so the medium term effect will be to level out the average house price fairly quickly, but the number of new homes for sale is still 37% below levels seen during January between 2005 and 2008.

Mark Leaper at Moneymatchmaker.com commented saying "Whilst the figures appear encouraging, it is worth remembering just how tough times have been for the UK consumer and the end is still some time away". He went on to say "Finding a mortgage match is a challenge and the best mortgage deals can very often be found by using the services of one of the many experienced uk mortgage brokers".