House price growth set to slow to 5%, says Rightmove

The average asking price of property coming to market rose for a  fifth consecutive month to hit a record high of £368,614, albeit only up by a modest 0.3%, or £1,113, in the month, as the pace of price growth slows, according to Rightmove.

This is the smallest increase since January, as the pace of price rises starts to slow. Despite five consecutive interest rate rises and the increasing cost of living, buyer demand for each available property remains very strong, being 113% higher than the pre-pandemic five-year May average.

The latest data, released this morning, shows signs that property price growth is continuing to ease, with this measure down by 8% in May compared to April.

After a very strong first half of the year, it is likely that affordability constraints will have a greater influence on market behaviour in the months ahead, with further interest rate rises anticipated. This, alongside more choice coming onto the market for buyers and the usual seasonal variations, means that there are likely to be some month-on-month price falls during the second half of the year. Rightmove predicts this to bring house price growth by the end of the year to around 5% – the same percentage increase it originally forecasted in December.

Rightmove’s Tim Bannister said: “The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years. When we look at the number of buyers contacting estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.

“We’re hearing from agents that though they might have had slightly fewer enquirers for each property in recent months, they’re still seeing significant interest from multiple buyers and are achieving successful sales. Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing.

“We expect this to bring the annual rate of price growth down from the current 9.7% towards the 5% increase that Rightmove predicted at the beginning of the year.”

 

Property industry reacts to Rightmove House Price Index

 

Homesearch EOS
x

Email the story to a friend



Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.