As the local property market shows clear signs of recovery estate agents say the only problem may be a lack of sufficient homes coming up for sale to meet demand.

Several factors – including an assurance from new Bank of England Governor Mark Carney that interest rates on borrowing will stay at a record low – means many more buyers are entering the market. “There’s no doubt the local market is showing signs of improvement and that confidence levels within it are improving,” said Your Move managing director for London Sam Michell.

“Government Schemes such as Funding for Lending and Help to Buy have contributed significantly to this by boosting lending to first time buyers and allowing more high loan to value mortgages to be made available,” added Mr Michell.

The Royal Institute of Chartered Surveyors said the property market in July grew at the fastest rate since 2009, with 53 per cent more of their members reporting an increase in demand from potential buyers during July. First time buyers in particular are taking the plunge, secure in the knowledge that both rates and prices are as low as they are likely to go. But as they rush to buy, prices are already being pushed up as sellers still hesitate to go to market, meaning there’s competition for the homes that are available for sale.

“I think the Bank of England announcement will be viewed as generally good, adding to the positive sentiment already out there and help to boost buyer sentiment in the short term but it is not without some concern,” said Mr Michell.

“While the (Bank of England) announcement may result in more movement in the market, both the lack of housing and rising competition in the property market could result in higher prices.”

Mr Michell says if the Government is “really serious about boosting home ownership levels,” they need to think about the number of homes that are available to buy as well as keeping interest rates low.

The new Bank of England Governor, Mark Carney, decision not to raise the Bank’s 0.5 per cent rate for borrowing until unemployment drops to 7 per cent is seen as better news for borrowers than for savers.

Welcoming the measure, Chancellor George Osborne said: “Families thinking of taking out a mortgage or a business thinking about expanding, are going to have greater certainty that interest rates are going to stay low for longer.”