Hometrack is forecasting further house price rises next year, as the property drought continues.

It is also predicting that property investors – who this year accounted for one in five transactions – will be less active.

Hometrack’s UK Cities House Price Index has recorded annual house price growth this year of 10.1% – in London, 13.3%.

The data analyst said that the growth has been driven by a “chronic shortage of homes for sale particularly in the latter half of 2015 which is reflected in the 5% drop in open market transaction volumes”.

It said that the shortage was exacerbated by fewer home owners moving, and by strong demand from investors who have been buying but not selling.

The Hometrack index tracks house prices in 20 cities, with affordability particularly stretched in London, Oxford and Cambridge.

However, Hometrack is predicting that next year, the engine for house price growth will come from cities where inflation has been much lower.

The firm is also predicting that recent policy interventions will result in weakened investor demand and “modest dis-investment”.

Richard Donnell, director of research at Hometrack, said: “The scarcity of homes for sale looks set to remain a feature of the market in 2016.

“This will only ease once we see greater levels of output from home builders and renewed activity amongst the 8m existing mortgaged home owners.

“Questions over the sustainability of house price growth are being raised as house prices accelerate on growing scarcity and lower sales volumes, especially in the high growth markets such as London.

“The greatest focus is on the influence of investor buyers, who we estimate account for one in every five buyers nationally.

“This group don’t need to buy homes and could react differently to home owners in the face of changing market or economic conditions.

“Assuming the first interest rate rise is in the second half of 2016, then we expect 7% growth in city level house prices over 2016 with housing transactions broadly flat.”

Separately, the NAEA has said that mortgage applicants are typically waiting 50 days to receive an offer, putting stress on chains, while Rightmove has reported an average of 110m visits per month on average this year, with the busiest month being March and the busiest single day being August 10.