The 30-year-old singer was spotted cosying up with him at the Brownstock Festival on Morris Farm in Essex over the weekend, Daily Mirror online.
"It's still early days but Mark is right up Sarah's street - he's cheeky, good-looking and talented. He's also, fairly obviously, massively into his music. He is really well connected and has a lot of celeb mates. Sarah is in a great place and ready for a relationship," a source said.
Although Harding's niece accompanied the pair to the event, they only had eyes for each other with the singer only tearing herself away from the DJ to sign autographs.
"They were all over each other. Mark looked like the cat that got the cream," the source added.