Lagging construction will result in further house price increases in 2016, Nationwide has warned.
Its House Price Index put annual growth at 4.4% in January 2016 after a 0.3% rise from December 2015.
Robert Gardner, Nationwide’s chief economist, said: “The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.
“As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level.”
Gardner said other factors will boost demand, as interest rates stay at rock bottom levels for longer, employment strengthens and wage growth rises.
The average house price reached £196,829 in January.