Activity in the housing market continued its upward trend in August, avoiding the traditional seasonal downturn.

The latest Hometrack House Price Survey shows that demand was up by 1.1% during the month on the back of improving market sentiment, something which has fallen in August over each of the previous three years. Supply, however, remains constrained, up by just 0.8%. Rising demand and sales agreed means that the recent momentum in house price growth has been maintained.

It has become almost customary for the housing market to suffer a drop in August as many people go on holiday and business activity across the country slows. However this year overall house prices grew across a third of the country in the highest price growth since May 2007. Average prices, meanwhile, were up by 0.4% during the month, following a 0.3% increase in July.

James Mackenzie Head of Strutt & Parker’s Country Department comments: “The continued momentum seems to have caught a lot of people by surprise. Over the last few years, August has been lifeless, but the great British spirit of getting on with things seems to have brought the market back to life.”

Much of the growth in supply during the summer months has been located in the regions outside London and the South East and the report says that improving market conditions and firmer pricing levels in the Midlands and Northern regions are bringing more sellers into the market.

Prices in London and the South East grew at an above average rate of 0.9% and 0.5% respectively, however other regions are starting to close the gap as the recovery in the housing market spreads. Nationwide, the gap has narrowed most rapidly in London and Southern England while improvements in underlying pricing levels are now feeding through in the northern and midlands regions.

The average time to sell a property fell from 8.2 weeks in July to 8.1 weeks in August, with London and the South East having the shortest sales periods, although sale times also have shortened in the midlands and northern regions.

Mackenzie concludes: “The public’s confidence in the market is being reflected in these figures and I think demand will continue to grow at a steady but sustainable pace. There is now added optimism for those who are launching their house this autumn.”