1 in 5 UK sellers are currently fetching higher than the asking price for their home.
In recent years, the financial crisis has meant that many sellers have struggled to sell their home at all, let alone reach their desired price tag. Now, though, with Britain's economy growing and confidence improving, the country is turning into a seller's market.
Despite the positive sentiment, housing supply remains low, which means that an increasing numebr of buyers are competing for a small number of properties.
Indeed, the supply of houses for sale has dropped by 27 per cent since this time last year, according to the National Association of Estate Agents (NAEA), with 44 properties available per NAEA registered branch.
As a result, buyers have been forced to increase their asking price to beat off competition and secure their property. One in five (19 per cent) properties sold for more than the asking price in May, nearly three times the seven percent recorded when NAEA first collected this data in September 2013.
Even those discounting to secure sales are seeing more favourable conditions: 46 per cent of sellers accepted lower than their asking price â the smallest percentage recorded since the data was collected in September 2013, when 71 per cent of sellers accepted below asking price.
With this necessity to pay more, NAEA member agents also reported an increase in the average number of sales agreed per branch, up from nine last month to ten in May.
Mark Hayward, Managing Director of the National Association of Estate Agents, 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 go 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 a property and looking to move may be put off by the cost of stamp duty.
"With limited numbers of houses for sale, unfortunately it means that those who simply canât afford to increase their original offer will often be priced out the market.
"With current speculation of the interest rate rising, we could see more homeowners putting their houses on the market in a panic that house prices may reduce as a result of interest rate and mortgage rate hikes. However the new Mortgage Market Review (MMR) rules may create âmortgage prisonersâ who cannot gain new mortgages for house moves, resulting in a slowdown of house sales and this coupled with recent sharp rises in house prices could start to take some of the strongest heat out of the property market."