The biggest monthly rise in London house prices for three years was recorded in March, according to a new report.

House prices in London have recorded their largest monthly rise since March 2010, figures reveal.

There was a 0.7% month-on-month increase in London house prices in March accompanied by an encouraging boost in other parts of the country, according to Hometrack.

The uplift was not confined to isolated pockets of the capital either, the data shows, with prices rising in three-fifths of London postcodes.

Demand appears to be thriving once again for residential property to buy in London, as Hometrack reported that properties are now on the market for just under five weeks before they are snapped up. That is the shortest average time period for London properties staying on the market since October 2007.

And while there has been much talk of the ongoing troubles of the eurozone having a negative knock-on effect on the UK economy, in fact the report suggests that the latest woes seen in Cyprus will actually work to the benefit of the UK and in particular London's property market.

More buyers will focus their property search on London as it is increasingly seen as a safe haven, the report indicates.

There was also positive news across the rest of England and Wales as prices went up in a fifth of postcodes, which is the highest proportion in three years. The only region to see a month-on-month fall was the North East with a 0.1% decline, while prices remained flat in the North West and East Midlands. East Anglia and the South East recorded 0.2% rises, while prices went up by 0.1% in Yorkshire and Humberside, the South West, Wales and the West Midlands.

The study appears to back up data released by lenders indicating that recent initiatives aimed at unclogging the flow of finance are starting to pay dividends. Help to Buy, a multibillion-pound scheme announced in the Budget that is designed to help people purchase property with a 5% deposit, is also expected to boost house prices.

Nevertheless, the Government has said it is committed to paving the way for sustainable growth in house prices as opposed to risking another bubble that would store up more trouble for the future.

"The general improvement in market sentiment on the back of rising prices will be welcomed across the housing industry," said Richard Donnell of Hometrack.

Ivor Campbell-Davys, head of the Strutt & Parker Fulham office, commented: "Whilst this spring market has shown a good increase in prices, I would suggest that these figures are representative of transactions that were agreed earlier in the year.

"Since then, there has been more property coming to the market and this has slowed the rise down. Certainly, properly priced, good quality stock is being agreed within three weeks of going to market. Anything taking longer is normally due to overzealous pricing or a degree of work being needed to improve the property.

"London is being seen as a safe haven for investment by investors, domestic and foreign, and by Europeans who, whilst they would normally rent, can't ignore the relative value in investing in the London market instead of their usual practice of renting. These exchanges in London will naturally be driving the commuter belt rises and that, in turn, will push pricing in other areas of the country, further from the economic centres."