The average asking price of a new home rose by 3.8% in May to £228,041, the highest level since October 2008, according to SmartNewHomes.

Strong positive growth was also recorded on a three month basis, up 4%, and the annual price growth was 3.4% in May, the highest increase for eight months.

The company reported: ‘The traditional ‘spring bounce’ in buying activity, recent good weather and continued low base rate have all contributed to higher demand for new homes. All major indices have shown a rise in average house prices in recent months. The general trend shows asking prices rising strongly and it is likely that this positive growth will be translated into further increases in the Land Registry and Nationwide Indices over the coming months.

‘The East and West Midlands saw the strongest price growth in May. Growth in the East Midlands has been driven by the region’s major city, Nottingham, which recorded price rises of 7.8%. Overall the regional markets remain volatile, and we expect this to remain the case for the foreseeable future as the current low rate of house building ensures that changes are calculated from a low base.’