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Sustained high demand and a relative lack of houses on the market kept property prices steady for the second month running in June, new research shows.

The average cost of a home in England and Wales remained unchanged during the month at £155,600, according to housing data group Hometrack.

The annual rate at which house prices are falling also continued to ease, with year-on-year property values 8.7% lower in June, down from a 9.6% drop in May.

Hometrack said rising sales volumes, a dwindling supply of homes on the market and a continued increase in demand were all helping to underpin prices at their current level.

Only 3% of postcode areas saw price falls during month, down from 32% in April and around 60% at the beginning of the year.

Richard Donnell, director of research at Hometrack, said: "A lack of supply and rising demand have combined to prop up house prices in the last two months.

"Over the last six months, the volume of buyers has grown by 36%, this compares to a 6.4% increase in the number of homes for sale."

Estate agents reported a further 5% increase in registrations from potential buyers during June, but there was only a 0.8% increase in the number of properties that were put on the market during the month.

The misalignment between supply and demand contributed to the average time for which a property is on the market dropping for the fifth month in a row to 9.4 weeks.

The percentage of their asking price that sellers achieved rose for the fourth consecutive month to 91%.

Sales levels also rose by 4.6% in June, and transaction volumes are now up by more than 80% since the beginning of the year, although the group cautioned that this was off a very low base.

Meanwhile, research from the National Association of Estate Agents suggested that the supply of property is beginning to increase.

A third of estate agents reported a 10% rise in the number of properties on the market compared with six months ago, while one in six said they had seen a jump of 20%.

Data on the housing market has been increasingly positive during the past few weeks but economists have warned that they do not think the market has reached the bottom of the cycle yet.