Prices in England and Wales rose by 0.3% this month, a pace not seen since March 2010 and an increase on February’s growth of 0.1%.

For a second month running there was also a rise in the number of new buyers registering with agents as well as increase in the volume of property listings.

London saw the strongest house price growth, with prices rising by 0.7% this month and 60% of postcodes seeing a price increase. Property in the capital spent an average of 4.9 weeks on the market – the lowest level since October 2007.

With the exception of the North East, pricing levels also improved across England and Wales, with prices rising across a fifth of postcodes. The strongest house price growth outside London was seen in the South East and East Anglia.

Hometrack director of research Richard Donnell said a lack of housing combined with a jump in sales underpinned the boost to prices: “Looking ahead, the continuation of the Funding for Lending Scheme together with budget initiatives aimed at supporting lending and demand for new housing, will only serve to support pricing levels.

“The general improvement in market sentiment on the back of rising prices will be welcomed across the housing industry.

“However, while scarcity of homes, support for lending and new housing will all act as a support to pricing levels, the problems of affordability and deposit levels still remain serious impediments to a full blown housing market recovery.”