The average asking price of property coming to the market has hit a near record-high this month, the latest figures from Rightmove show, but the market remains price-sensitive.

The top-of-the-ladder sector is still leading price growth, with average prices up by 1.3% compared with last year

Pent-up demand from would-be buyers who paused their plans last year is a key driver behind increased home-mover activity despite mortgage rates remaining elevated for longer than anticipated.

Asking prices hit record high as estate agents respond to improving market – Property Industry Eye

Industry reactions: 

Nick Leeming, Chairman of Jackson-Stops, said: “Seasonal demand and an uptick in listings has helped to boost spring transactions, although some may still be waiting in the wings for an elusive interest rate drop to ease affordability constraints. With inflation falling, there is hope the wait may come to an end soon as the Bank of England may look for an economic boost before the General Election.

“The message here is that lifestyle changes and supply are still the dominating market forces for most, anchoring house prices for the foreseeable future to provide much needed stability and assurance. The more positive macro-economic outlook in recent weeks has even led some to revise house price forecasts for the year upwards from decline to growth; consumer confidence that will likely trickle into a busy summer ahead.

“In particular, demand for detached homes and prime country properties are attracting the highest competition from buyers, as beauty spots come into their own, with the sun finally out and people aiming to move by the end of the year. Places like the Cotswolds, Essex and Hampshire have seen a remarkable uptick in buyer enquiries in the past six weeks, notably from families looking for top schools.”

Nathan Emerson, CEO of Propertymark, commented: “Spring heading into summer is traditionally a busy time for the housing market and these latest figures may prove an ideal inspiration for sellers to use this as an opportunity to place their property on the market. Propertymark’s own Housing Insight Report demonstrates that there has been a recent 4 per cent increase in the number of potential buyers registered at each member branch, representing a strong appetite for buying and selling homes currently.

“Buyers and sellers are adapting to current inflation levels and higher interest rates, however the more these two factors come downward, the more likely that there will be a further stimulation in housing market growth. With supply still being a central issue, with a general election on the horizon we hope all political parties focus on increasing the number of houses in the medium to long term.”

Matt Thompson, head of sales at Chestertons, remarked: “Some house hunters waited for the Bank of England to cut interest rates earlier this month but as this did not happen, buyers quickly resumed their search. As an increasing number of lenders are now cutting mortgage rates, buyers feel slightly more confident about their financing options. We expect this shift in the market to fuel buyer demand this summer – particularly in London where the volume of buyers still outweighs the number of available properties.”

Anthony Codling, head of European housing and building materials for investment bank RBC Capital Markets, noted: “Whilst few would say that the UK housing market is buoyant, asking prices reached a record high in May according to Rightmove. Even in the face of stretched housing affordability, the imbalance of demand and supply continues to drive house prices upward, and with a planning system moving at a glacial pace it seems unlikely that house prices will cool in the near future. This is good news for housebuilders allowing them to keep selling prices firm even though the underlying housing market faces headwinds of macroeconomic uncertainty and stubbornly high mortgage rates.”

Anthony Kyriacou, founder and CEO of krispyhouse, said: “House prices have increased by 0.8% in May according to Rightmove’s latest index, rising due to a sharp increase in transactions. This is always the busiest time of year for house buying, but buyers are also being enticed by the prospect of there being – at long last – a rates cut from the Bank of England, which will lower mortgage rates. In anticipation, Barclays Bank, HSBC, and TSB slashed their mortgage rates last week, and more providers are expected to soon follow.

“In terms of the rental market, rising house prices due to transactions reflect the fact that more consumers are willing and able to trade rental accommodation for a home of their own. This will bring some relief on rents, as it will free up rental accommodation as buyers make the swap. Ultimately, though, we cannot rely on changes in mortgage rates to make any lasting improvements to Britain’s difficult housing market – on this front, there is no substitute to a large and sustained increase in supply.”

Dan Salmons, CEO at property technology company Coadjute, added: “Whilst long completion times have been a fact of life for years, it remains painful for home-movers, and we see it as something technology can and will solve. At the heart of it, the delays are caused by problems of communication, and the difficulty in rapidly obtaining accurate data in a secure way. There’s certainly a lot of progress that can be made, and whilst there’s no silver bullet, we hope to eventually see some dramatic improvements in the current time to complete.”

Asking prices hit record high as estate agents respond to improving market