The average price of a house hit a record high of £375,131 in May, according to Rightmove.
Across the UK, prices of properties on the market rose by 0.8%, or £2,807, compared to the previous month.
Rightmove said pent-up demand from prospective buyers who paused their plans last year was the main driver of increased home moving activity, despite mortgage rates rising for longer than expected.
The number of agreed sales in the first four months of the year was up 17% on last year.
May is typically a strong month for price growth, with new price records set in May in 12 of the last 22 years, the report said.
Since the last price record, set a year ago in May 2023, average prices have risen only 0.6% overall, he said, adding that this is a reminder that the market remains very price sensitive.
In a positive sign for the mortgage market, HSBC UK, Barclays and TSB cut mortgage rates last Friday.
“Momentum from the spring selling season has put upward pressure on prices to reach new record asking prices,” said Tim Bannister, director of property science at Rightmove.
RightMove expects the number of completed home sales to reach around 1.1 million this year, but says the long time it takes to complete a sale after finding a buyer remains a challenge for agents and movers alike.
The average time from sale consent to legal completion is 5 months. Overall, it takes sellers on average more than seven months to complete a move from being on the market, meaning sellers hoping to celebrate Christmas in their new home should be on the market by now, the website said.
Property company Hamptons said tenants renewing existing contracts in the UK typically saw rents rise by an average of 8.3% in the 12 months to April, outpacing the 6.4% increase in rents for newly let properties.
Aneisha Beveridge, head of research at Hamptons, said: “Strong rental growth in the open market over the past two years has led to a significant increase in the gap between market rates and what some tenants are paying.
“The wide gap between market rates and what many renters are paying creates a huge disincentive to move unless absolutely necessary. Moving means going home less to make more money.
“Over time, the gap between what existing and new tenants are paying will eventually narrow, but it may take longer for rental growth on the open markets to start to pick up again.”