Average new seller asking prices hit record high of £312,625 in March, pushing annual price growth to 3.5% according to the latest house price index by Rightmove.
The number of sales agreed was up by 17.8% which is the highest at this time of year since 2016.
Properties are selling an average of 6% faster nationally, and 18% more quickly in London.
The disparity between supply and demand as new seller numbers rose by 1.2%.
The average asking price of property coming to market has hit a new all-time high, beating the previous record set in June 2018 by some £3,186.
The small monthly rise in March (1%) has pushed the average house price up to £312,625, a 3.5% year-on-year rise and the highest annual rate of price growth since December 2016.
Miles Shipside, director and housing market analyst at Rightmove, said: “The average asking prices of over 110,000 properties that have come to market this month are at a record high as we enter the traditionally busy spring moving season.
“As a result, we are measuring the highest annual rate of increase since December 2016.
“Many more properties are being bought, and bought more quickly than at this time last year. This is further fuelling the existing shortage of property available for sale, driving up prices to a new record high.
“New supply to the market has failed to keep anything close to the pace of demand.
“Purchasers in a position to buy have been snapping up what’s currently on the market, rather than waiting for the usual post-Easter flurry of fresh supply.
“There are marginally more owners putting their properties on the market compared to this time last year, but it is usual for sellers to want to wait for another month or two until there are more leaves on the trees to soften the starkness of their photographs and harden up their pricing prospects.”
Rightmove claim that it is difficult to predict how this post-election boost in market activity will be affected by the unknown impact of the COVID-19 coronavirus.
Rightmove’s latest statistics indicate that the market fundamentals remain broadly sound.
The statistics also show that the new 2% stamp duty surcharge for non-UK residents may eventually temper the current recovery in some sectors of the London market from April 2021, though it will also provide a negotiating advantage to UK buyers.
Shipside added: “The market has been waiting for several years for a window of certainty, and 2020 seemed set to be the year when many would look to make a move and satisfy their pent-up housing needs.
“However, the current fast pace of the housing market could now be temporarily affected by the spread of the COVID-19 coronavirus.
“We expect that housing market statistics, like other economic indicators, could be prone to volatility over the Spring and Summer.
“However the market fundamentals are still very sound, hence the current surge in activity, which has included Rightmove’s five busiest days ever.
“There have been no signs so far of a drop in buyer activity or interest in the housing market.”