August was a record month for new sales listings but there are signs of a market correction.
Analysis by property website Home.co.uk found there were just over 125,000 new instructions entered the UK market last month, which is 25% more than in August 2019.
This is the highest number of new listings in a single month since May 2011.
Overall, the total stock on the market is still down 7.3% annually.
The website said much of the stock for sale is being covered by pent-up demand but warned excessive supply, particularly in London where listings are up 71% annually, is risking a market correction.
Average asking prices are now up 3.8% annually to £320,190, Home.co.uk said
The research found 6% fewer properties on the market were reduced in price last month compared with August 2019 but warned the average price cut is now 8.8% higher.
Doug Shephard, director of Home.co.uk, said: “Supply shocks always trigger a period of price rediscovery.
“This is the case for any market, including the troubled London property market. Prior to the Covid-19 pandemic, the UK’s leading market looked set for a return to growth after a protracted period of price correction.
“Now, post-lockdown, with supply going through the roof, London’s prospects look hugely different.”