The average price of UK property coming to the market reached record levels in May, rising by £2,807, as the spring selling season lent itself to the recovery of the housing market.
According to a new report by Rightmove, homes up for sale in May cost an average of £375,000, up 0.8 per cent on last month.
The property portal said May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years.
Rightmove said: “Price growth is still led by the largest-homes, top-of-the-ladder sector, with prices in this sector up by an average of 1.3 per cent compared with last year.
“However, since the last price record set a year ago in May 2023, average prices are only 0.6 per cent higher overall, a reminder that the market remains very price-sensitive.”
Sentiment in the housing market has shown signs of improvement this year despite mortgage rates increasing and the Bank of England continuing to hold interest rates at 5.25 per cent.
The number of sales being agreed during the first four months of the year is 17 per cent higher than last year, outstripping the 12 per cent increase in the number of new sellers coming to market.
Tim Bannister, Rightmove’s director of Property Science, said: “Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the Base Rate up to 5.25 per cent, where it has remained since August 2023.
“However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price. The top-of-the-ladder sector is still leading the way, while from a regional perspective the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth.”
He added: “It’s important to remember that prices overall are still only 0.6 per cent ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched.”