The London market has been described as a “feeding frenzy” with rival agents driving up prices by touting for properties that are under offer but have yet to exchange.

Other agents say they are having to advise their own sellers, under their fiduciary duties, that the value of their property has shot up since the sale was agreed.

There has also been a fall in transactions, described as “staggering” by one source.

Peter Rollings, chief executive of Marsh & Parsons, said that lack of stock and intense demand is creating various issues including the phenomenon of “ghost gazumping” – when prices go up at the last moment, even when there is no rival buyer.

He said: “If a property hasn’t exchanged in say two months, other agents may be on the telephone to the seller telling them that they are under-selling.

“Alternatively, the seller might be out looking and seeing prices increasing and call us and want to put the price up.

“The third thing that is happening, and happened today, is that if a buyer takes too much time exchanging contracts, other people who viewed the property before and elected not to offer, having seen what else is in the market, come back and make an increased offer.

“It is then our task to explain to a buyer that they are being asked to pay more or lose the property, which obviously leads to anger and frustration.

“I suppose there are those who would say that we must like this as we’re getting more commission. However, at this stage it is a very small amount extra and frankly not worth the stress and angst that it puts us and the buyer through. However, it’s our job to be the bearer of good and bad news and we’re used to it by now.

“My feeling is that there is starting to be more stock coming to market and that this ‘feeding frenzy’ will subside, which will frankly be good for the long-term health of the market.”

Ed Mead, of Douglas & Gordon, said: “Ghost gazumping is a lovely expression for an age-old issue, namely the length of time it takes from agree to exchange. We are now seeing this at almost double where it was two years ago, nearly 11 weeks given the problems getting mortgages through.

“So if you are selling a property and you have to wait three months (and that’s an average, some are much longer), will the value have gone up? Yes.

“Unfortunately, for the buyer, we are paid by the sellers and have to point out that the property may now be worth more.

“Most owners don’t care and want the deal to go through and they’re right, for the sake of 5%. But if the value has gone up by more, an agent not pointing this out means we are not doing our job properly. So, it’s not uncommon.

“The biggest issue of the Budget is that agents are now going to be the guardians of many people’s pensions. Buy-to-lets will literally be pension pots, so people should choose their agents carefully, as they have their future in their hands.”

Dominic Agace, chief executive of Winkworth, confirmed the unusual behaviour in the marketplace.

He said: “It’s something that has not been around before. We have obviously had gazumping in the past, but this is not something I have ever seen until now.”

He added: “We’ve just seen it happen with one house where the deal was struck at £1m but the sellers have gone back and asked for £1.1m. The buyers are paying the higher amount.”

According to Rightmove, the average asking price for a property in Greater London is now £552,530 – up 11.3% on a year ago and up 2.1% in a month, and a new record. Average time on the market in London has fallen to just over 50 days, but this is “subject to contract” time and not “sold”.

According to William Carrington of Lonres, the capital’s market is extraordinarily tight.

He told Eye that across the Lonres patch, between February 21 and March 20 last year, there were 1,438 transactions. Over the same (and very immediate) period this year, there were 1,128 transactions.

He said of the “staggering” 21% drop: “This could go some way to explaining some of the practices currently taking place in the market.”