Transactions were down 14% in May compared with a year ago, while house prices across England and Wales hit a new high, despite a slower rate of growth.

The average house price was £277,178, according to today’s LSL/Acadata house price index.

While this was a fourth new record for this year, monthly house price growth was 0.4%, a third of what it was a year ago.

Separately, the RICS this morning reports the lowest number of homes for sale since its records began in 1978.

The RICS said there is an “acute shortage of supply” as households move less frequently. It found that each of its estate agency members had 52 properties for sale per branch in May.

Chief economist Simon Rubinsohn said that falling supply was part of a clear trend that had been going on for two years.

He said that post-election, it had been expected that more properties would come to the market. “But the initial indications are that this is not proving to be the case,” he said.

“It is hardly surprising that prices across much of the country are continuing to be squeezed higher.” The RICS predicts house prices will rise 25% over the next five years, with “no real confidence” that Government plans to build more homes will fix the crisis.

According to the LSL Acadata house price survey, London was last month knocked into fourth place in regional rankings of growth, with house prices in Kensington & Chelsea now 16% below their peak of autumn last year – the fall blamed on higher Stamp Duty Land Tax rates for more expensive homes.

Transactions in London were down 16% year on year in the three months to April – the most significant drop anywhere across England and Wales.

Adrian Gill, director of Reeds Rains and Your Move estate agents, said: “There are only four outstanding regions across the country where house prices are still below the 2007/2008 benchmarks, but the tide is going in the right direction.

“For instance, while average property values in the north are still 4% lower than during the pre-crisis years, this region has experienced the fastest increase in the rate of annual growth recently.

“Prices in the north-west, south-west and east midlands are also on the up, at the same time that growth in London is waning.”

He added: “Completed house sales in England and Wales rose 10% since April to total 67,300 in May, but this still represents a 14% drop compared with a year ago.”

He said the lack of properties on the market “is starting to choke off activity” and that this needs urgently addressing.