A 5% rise in new home sales listings signals the “green shoots of recovery in market supply”, while the rate of house price growth is starting to slow, according to Zoopla.

The supply of new homes coming to market in the four weeks to 27 February was 5% higher compared to the five-year average, says the property website’s monthly House Price Index.

It says: “With demand for houses near record highs, there are long-awaited signs that supply is starting to return to the market, with new listings of homes for sale at 5% above the five-year average.

“Despite total stock levels remaining down on the medium-term average, this rise in new supply indicates green shoots of recovery for stock levels, signalling a possible return to pre-pandemic stability for the rest of 2022.”

It adds that new listings have risen for every property type in the first two months of the year compared to the same period 12 months ago.

The report says that data for January and February also shows a rise in the supply of larger detached family homes coming on to the market, which “is finally answering the ongoing demand for three-bed homes, which continue to be the most sought-after property in the country”.

Larger homes have become more popular since the pandemic as workers seek more space as they adjust to the rising trend of working from home.

New supply is up on pre-pandemic levels for this time of year in four regions – Scotland, East Midlands, North East and Yorkshire – and matches pre-pandemic levels in the North West and West Midlands, the index says.

But it adds that overall demand continues to outpace supply, with the average house price now standing at £244,100, a rise of 7.8% in the year to the end of January. However, this is down from 8% in December.

The continued near-record demand for housing has seen the busiest start to the year since 2016, with sales agreed in 2022 to date matching levels seen at the start of 2021, the survey says.

In January, half of all homes where sales were agreed were snapped up within three weeks of coming to market, compared to a third of properties during the same period last year. By comparison, in the same period in 2021, a third of all properties that sold progressed from listing to sale agreed within three weeks.

The survey says there are also early signs that the rate of average house price growth is beginning to ease, with the quarterly rise in the three months to January at its lowest level since August 2020.

However, the average value of flats across the UK is up 2.6% on the year – the highest level since August 2017.

The survey points out that house price remains highly localised.

In Wales, average values are up 11.7% on the year, with price growth ranging from 16.6% in Powys to 8.7% in Flintshire. In addition, houses in the South West of England continue are up by an average rise of 9.7%.

But by contrast, in London, average prices lifted by 3.1%, the report says, “rising most prominently in the borough of Bromley at 6.9% where there is greater headroom for growth, while house prices in the City of London have fallen by 2.2%”.

Zoopla head of research Grainne Gilmore says: “The sheer level of activity in the market in recent years eroded the stock of homes for sale.

“But the data indicates that more homes are now coming to the market, as movers and other owners list their properties for sale – and this will create more choice for the many buyers active in the market.

“However the imbalance between high demand and supply will take much longer to unwind, and this imbalance will continue to underpin pricing in the coming year.

“Even so, we expect the rate of annual house price growth to ease over the course of 2022, as economic headwinds, including mortgage rate rises and the rising cost of living, put the brakes on price rises.”

Zoopla says it continues to expect 1.2 million home sales this year, down from 1.5 million in 2021, and that average house price growth will be between 2% and 4% by the end of the year.

Hargreaves Lansdown senior personal finance analyst Sarah Coles says: “The New Year saw a surge of sellers keen to make a new start. There’s a good chance that some of this was driven by the rate rise in December, and the worry that if they didn’t hurry up and make a move, they’d end up paying much more for a mortgage on their new home a few months down the line.

“Buyers, meanwhile, have been desperately waiting for new stock, so were poised to snap them up. Half of the homes on which sales were agreed were snapped up within three weeks.

“But this is likely to be a short-lived phenomenon, because buyers are coming under increasing pressure. Even if they decide they can take the interest rate rises in December and February on the chin, rising prices may be enough to cool their enthusiasm.

“With much higher energy bills hitting the nation’s doormats, the cost of filling up at the forecourt soaring, and higher prices on everything from food to furniture, there will come a time when a bigger mortgage feels like a step too far.

“The war between Russia and Ukraine will have a major impact too, both on sentiment and on pushing these prices even higher. It could be the final burden that buyers decide they can’t bear, which calms the January flurry to barely a flutter as we go further into 2022.”