Average house prices have climbed about £20,000 in the last year, the Halifax says, as the buying frenzy prompted by the stamp duty holiday continues.
Prices are up 8.2% in the last 12 months, the highest annual growth rate for five years, it said.
Altura mortgage broker Rob Gill said "fear of missing out" (FOMO) was driving the surge.
"There's a fear among buyers that they could miss out if they don't hurry up and buy before prices spiral," he said.
The Halifax said that prices rose sharply in April, up by 1.4% compared with March. The average price of a UK home hit £258,204, a record high.
At the Budget, Chancellor Rishi Sunak extended the stamp duty holiday to June. The property purchase tax has been suspended on the first £500,000 of all sales in England and Northern Ireland since July to support the market.
"The stamp duty holiday continues to add impetus to an extremely active market, magnifying the current shortage of available homes as buyers aim to take advantage of the Government scheme," said Russell Galley, managing director at Halifax.
He predicted that the influence of the stamp duty holiday will fade gradually over the coming months as it is tapered out but that low stock levels, low interest rates and continued demand is likely to continue to underpin prices in the market.
'I'm like a hawk on Rightmove'
Kirsty Kirby is a first-time buyer in South Yorkshire who has been planning to move house since 2018. But the 37-year-old pharmaceutical worker says even getting a viewing for a property is a challenge.
"I ring for many properties," she says. "I'm like a hawk on Rightmove, I must refresh it several times an hour, just to see what's on."
Kirsty says most homes she enquires about already have multiple viewing bookings within minutes of appearing online and estate agents warn her the house will be going to 'best and final' offers.
Best and final is a system where buyers put in one offer for the seller to choose from, in order to avoid a bidding war between prospective home-owners.
Kirsty says, in her experience, anytime a property goes to best and final "it goes way above the asking price because people get crazy".
"This market isn't standing still for a second," said analyst Lucy Pendleton of estate agents James Pendleton. "The feeding frenzy for property was already feeling pretty ferocious but then along comes another big leap in the annual rate of [house price] growth."
She said the current state of the market means timing is crucial for buyers and not wasting time is essential.
"In a blazing hot seller's market like this, most buyers don't even compare prices locally to make their offer, they work out what they can afford and they go for it."
Nicky Stevenson, managing director at estate agent Fine & Country, said: "Buyers need to be incredibly determined to succeed in a market like this."
She predicted that the market rally will continue with optimism being complemented by improving weather, the imminent loosening of Covid restrictions, low interest rates, a yearning for more space and the fact that many homeowners have saved thousands of pounds not being able to go anywhere.
"This won't be the last record high we'll see this year by a long stretch," she said.