One in six homes were snapped up for more than the original asking price last month according to estate agents.

16% of home being purchased sold for more than the selling price, marking the highest proportion of homes selling for above the asking price in about seven years.

The number of sales agreed was also the highest for the month of March since 2007, NAEA (National Association of Estate Agents) Propertymark said.

An average of 12 sales were agreed per estate agency branch – the highest figure for March since 2007 when the number was also 12.

More than a quarter (27%) of sales in March were made to first-time buyers – the highest figure since June 2020.

Last week, major banks have unleashed a wave of new five per cent deposit mortgages onto the market, to help first-time buyers and home movers.

The move comes as part of a new government-backed scheme unveiled by Chancellor Rishi Sunak in the 2021 Budget announcement. 

The Chancellor announced a “mortgage guarantee”, as he told MPs: “Lenders who provide mortgages to homebuyers who can only afford a five per cent deposit will benefit from a Government guarantee on those mortgages.

“I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95 per cent mortgages from next month, and I know more, including Virgin Money will follow shortly after.

“A policy that gives people who can’t afford a big deposit the chance to buy their own home. As the prime minister has said, we want to turn generation rent into generation buy.”

A stamp duty holiday, which was due to end on March 31 2021, was also extended in the recent Budget.

NAEA Propertymark said the 16% of properties selling for over the asking price in March was the highest figure since May 2014, when 19% of properties sold for more than the original asking price.

A third (33%) of homes sold for less than the original asking price in March – the lowest number since records started.

Mark Hayward, chief policy adviser at Propertymark, said: “It is fantastic to see the property market continuing to thrive, fuelled by the announcement to extend the stamp duty holiday.

“The pandemic has meant many homeowners currently living in urban and city areas have reconsidered their lifestyle and are now reprioritising how and where they want to live, especially with working from home becoming the new normal.

“The imbalance of supply and demand means it’s an extremely strong sellers’ market; properties are selling quickly and for over the asking price, and this is something we expect will continue in the coming months.”