Research from the National Association of Estate Agents (NAEA) revealed that 19 per cent of properties sold for more than the asking price in May, nearly three times more than the seven per cent recorded in September 2013.

The study found that the supply of new homes has dropped by 27 per cent since this time last year, with just 44 properties available per NAEA registered branch.

Mark Hayward, managing director of the NAEA, said: “The number of house-hunters is substantially higher than the number of properties on the market, so competition is always going to be rife. Unfortunately the lack of housing problem is not going to away anytime soon. We have seen a shortage in the number of new builds in the last five or so years, and those who are currently in property and looking to move may be put off by stamp duty.”

Such stiff competition is affecting the first time buyer market in particular as buyers with limited budgets struggle to match escalating prices.

The NAEA found that the proportion of first time buyers purchasing a home in May shrank to 25 per cent, down from 28 per cent in April.

Hayward said: “With limited numbers of houses for sale, unfortunately it means that those who simply can’t afford to increase their original offer will often be pushed out of the market.”

While speculation about interest rate rises could spur more homeowners to sell before rate increases, the new Mortgage Market Review (MMR) rules – which came into force in April and impose strict rules on mortgage lending – could result in a slowdown of sales as people struggle to borrow.

Hayward said: “This coupled with recent sharp rises in house prices could start to take some of the strongest heat out of the property market.”