The average price tag on a home reached a new record high of £312,625 in March, a property website has reported.
Across Britain, average seller asking prices in March were £3,226 higher than in February, Rightmove said.
The new all-time high beat a previous record set in June 2018 by £3,186.
Asking prices in March are up by 3.5% compared with a year ago.
Rightmove director Miles Shipside 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.”
The average time to sell a property is now 67 days, down from around 71-and-a-half days a year ago.
Mr Shipside continued: “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 said that, looking ahead, potentially lower mortgage rates as a result of the Bank of England’s base rate cut last week could help to support the housing market.
But Mr Shipside said the spread of coronavirus could temporarily affect the housing market pick-up.
He said: “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.”
Rightmove’s report also quoted the views of estate agents.
Nick Leeming, chairman of Jackson-Stops, said: “Those looking to move soon should start speaking to their local agent now with a view to launching while competition remains fairly low and borrowing costs are back down to the lowest level in history following the Bank of England’s cut to interest rates.
“As an industry, we are yet to see the impact of Covid-19 on the market; however, if fewer people opt to holiday abroad over summer, we could perhaps see an increase in activity in this traditionally slower period.”
Glynis Frew, chief executive of Hunters, said: “There’s still a bit of work to be done to address the supply and demand imbalance.”