House prices rose to record levels in May, but the market has shown signs of cooling, according to bank Halifax's house price index.

According to the research, the average price of a house in eastern England in May was £337,216, an annual increase of 11.6%.

The typical value of a property increased by £2,857 across the UK month-on-month and has now risen for 11 consecutive months.

The report says that an imbalance between supply and demand for properties is the main reason for the upward curve.

Tim Dansie, from Jackson Stops, said: "The market as we all know is high. It will be interesting to see how long this will last.

"We are still achieving strong results and correctly priced properties are still selling well and in some cases exceeding their guide prices.

"There are examples of houses that are priced ‘above’ the market and are as a result sticking. Now is still a good time to sell as there is a shortage of stock and a number of unsatisfied purchasers."

The research does, however, suggest that the market is showing signs of cooling, with mortgage activity decreasing, adding to inflationary pressures on households and the potential slowing of activity.

The current market situation has also led to a rise in off-market sales, according to another study by Hamptons.

The research shows that more people are willing to pay a premium to secure a property before it reaches the market.

Oliver Johnson, from Clarke and Simpson, has seen a few sales agreed in Suffolk using this method, but says there is still a preference to allow homes to go to the open market to "ensure the best value is achieved".

He said: "For the correct circumstances, such as a vendor’s personal circumstances, an off-market sale can be preferable to a full marketing campaign on the open market.

"In our experience, this is a method of sale better suited to the more valuable properties, and where purchasers have larger budgets.

"The possible downside, however, is that a vendor can never be 100% sure that the best price has been achieved given the volatile market conditions we have seen of late, and how competitive bidding scenarios have almost become the norm."