As the flowers bloom and the days get longer, the UK’s housing market is also experiencing a springtime bloom of its own. According to Rightmove, house asking prices have once again inched upwards last month, marking a new record in the ongoing story of the UK property market. In May, the typical asking price for a home reached a staggering £375,131, an increase of 0.8% from April, or £2,807 more than the previous month. This increase in May is part of a consistent upward trend observed for the fifth consecutive month.
Despite these monthly increases, the annual comparison reveals a modest growth of just 0.6% compared to last year. This slow year-on-year growth rate can be attributed to a series of price drops experienced in late 2023 and early 2024, from which the market is only just recovering.
Buyers Are Back
The rising prices are linked to a significant return of buyers to the market, a rebound from last year when many had paused their home-buying plans due to soaring mortgage rates. The first four months of this year have seen a 17% increase in sales agreed compared to the same period last year, spurred by this renewed buyer interest.
However, Tim Bannister, Rightmove‘s director of property science, points out that the market remains sensitive to pricing. With mortgage rates still high, affordability continues to stretch thin for many potential homeowners. In a slight relief, major lenders like Barclays and HSBC have recently trimmed some of their mortgage rates, hinting at possible easier conditions ahead.
The Prolonged Path to Purchase
For those diving into the housing market, patience is necessary. Rightmove reports a “painful” average of 154 days from the agreement of a sale to its legal completion. This timeframe underscores the slow process of securing a home, with an average of 62 days needed just to find a buyer.
Rightmove advises those hoping to move by Christmas to start their selling process now, leveraging the busy spring into summer season, which typically sees heightened market activity.
Demand Variations Across Home Types
The demand and consequent price increases are not uniform across all types of properties. Large family homes, defined as those with five or more bedrooms or four-bedroom detached houses, have seen the most significant price increase over the past month at 1.6%, reaching an average price of £682,661.
In contrast, homes suited for “second steppers”—typically three or four bedrooms, not detached—saw a modest rise of 0.2%, setting the average price at £343,268. First-time buyer homes, smaller properties with one or two bedrooms, experienced a 0.4% increase, bringing the average price to £228,003.
Regional Highlights
Regionally, the North East of England stands out with a significant annual price rise of 5.8%, although it still boasts the lowest average prices in the UK at £190,158. The South East saw the most considerable monthly price uptick of 1.4% but has experienced a slight year-on-year decline of 0.1%.