House sellers’ asking prices have lifted to record highs for two months in a row amid a “ridiculously tight” supply of homes for buyers to choose from in many areas of the south, a property website has reported.

New seller asking prices hit a new peak of £262,594 in April across England and Wales, which is 7.3% higher than a year ago, marking the fastest annual rate of increase seen since October 2007, Rightmove said.

Prices are up by 2.6% on a previous record of £255,962 set only last month, according to the website’s records, which go back 12 years to 2002.

Asking prices hit new records in April of around £335,142 in the south east.

Prices are higher in every region across England and Wales than they were a year ago, with London seeing the biggest leap and the West Midlands the smallest, with a 0.8% annual increase taking prices there to £194,175 on average.

Strengthening housing market activity has fuelled concerns that property values are surging to unaffordable levels in places where the supply of homes is not enough to keep pace with the growth in demand.

Last week, the Royal Institution of Chartered Surveyors (Rics) said there is a “desperate need” to address the lack of homes on the market, warning that house prices will continue surging by around 6% annually for the next five years unless more is done.

Mortgage support schemes such as the Government’s Help to Buy and improving consumer confidence have prompted more buyers to flood into the market in recent months, while London is continuing to attract strong interest from overseas buyers.

Miles Shipside, director of Rightmove, said: “There are vicious circles where there is so little property for sale that few local home owners are willing to come to market to trade up, exacerbating the shortages and boosting sellers’ pricing power.

“While there are some hot spots emerging in the north, the momentum is not nearly as fast-paced and the better match between supply and demand means that the market is running at more sustainable levels.”