According to Rightmove, the average price of a home for sale increased by 0.6%, or £2,335, this month to a new record of £379,517.
The seasonality of the property market means that we have now seen a May price record for the last five years. But this month’s increase is smaller than usual, and the lowest in May since 2016, reflecting a more subdued late Spring market.
The number of available homes for sale continues to run at a ten-year high, creating competition between sellers to secure a buyer for their home, and limiting growth in newly-advertised property prices.
April saw what appears to be a post-stamp-duty-increase lull in new buyer demand, measured by the number of people contacting estate agents about homes for sale. This slowdown in new buyer demand follows a busy first quarter of the year, though there are early signs that the lull may be short-lived.
Mortgage rates, which are currently trickling downwards, will be crucial in determining the level of buyer activity for the rest of the year, according to Rightmove’s Colleen Babcock.
Babcock said: “It’s another new price record this month, but having seen a May price record for the last five years, it appears to be driven more by seasonal factors given that new buyer demand has slowed. The ten-year high choice of homes for sale means that sellers need to be aware of the level of competition they’re facing for the attention of buyers, and the prices that are being advertised in their location.
“In the current market, buyers may well have several similar homes to choose from in their area, and a home which appears over-priced compared to the competition may not get a second look. This month’s price increase being the lowest in May for nine years is a sign of a market that favours buyers and is more subdued than usual.”
Property industry reacts to latest Rightmove House Price Index
