The average price tag on a home reached a record high in May after jumping by £6,647 or 1.8% month-on-month, according to Rightmove.Across Britain, the average asking price for a home coming to market is £372,894, the property portal said.
The 1.8% month-on-month increase in the average asking price is the biggest of the year so far, it added.
However, the current “hyper-local” market is still price-sensitive and buyer affordability remains stretched, Rightmove said.
Industry reactions:
Jeremy Leaf, north London estate agent, said: “These are, of course, only asking or aspirational prices, not prices paid but do reflect what we have also been seeing in our offices – now that inflation and interest rates seem to be at or approaching their peak buyers are slowly returning with added confidence making it feel like a more normal spring market.
“However, without the intense competition for property that we saw 12 months ago, those not relying on mortgages or who are equity rich from Covid are very much to the fore but don’t want to be rushed before taking the plunge.
“The reasons for moving in many cases haven’t disappeared even though the race for space may be run. Looking forward we don’t see any particularly significant changes other than supply and demand continuing to balance out.”
Tom Bill, head of UK residential research at Knight Frank, commented: “The shock of the mini-Budget meant the property market effectively shut early for Christmas and then got going later than normal in spring. Transactions are recovering after hitting their low-point in January and it’s shaping up to be a solid but not spectacular year as the impact of a recovering economy, strong jobs market and record levels of housing equity are kept in check by mortgage rates that are notably higher than 18 months ago. As the political temperature rises ahead of a likely 2024 general election, it should also be the steadiest year for the property market since 2018.”
Adam Feather, head of Robert Anthony Estate Agents, said: “Sellers appear to be growing in confidence as greater stability in the mortgage sector and signs that the economy is improving helps generate more transactions.
“There is no doubt that properties are only selling at the right price, with overpriced stock ignored by buyers, and that is why it is important that vendors allow agents to price realistically, ensuring that new instructions get sold.”
Tomer Aboody, director of property lender MT Finance, commented: “With mortgage rates becoming more stable and considerably lower than around the time of the Kwasi budget, there’s definitely more confidence in the market with sales numbers almost returning to around pre-pandemic levels. More sellers are coming to the market and buyers are feeling more bullish in proceeding with their purchases.
“With possibly the final base rate increase on the horizon and some positive noises coming from the government, it will be interesting to see how the market further adjusts and whether it continues to defy expectations in coming months.”
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