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The average British house price soared to a record high of £375,131 in May, as reported by Rightmove. This represents a 0.8% month-on-month increase, or £2,807, in the prices of properties coming to market.
Rightmove attributes this rise to pent-up demand from would-be buyers who had paused their plans last year. This increased activity among home movers persists despite mortgage rates remaining elevated longer than expected. The number of sales agreed in the first four months of the year was 17% higher compared to the same period last year.
May has traditionally been a strong month for price growth, with new price records set in May in 12 of the past 22 years. Since the last record in May 2023, average prices have increased by only 0.6% overall.
Tim Bannister, Rightmove’s director of property science, noted, “The momentum of the spring selling season has exerted enough upwards price pressure to reach a new record asking price.”
Rightmove forecasts that the number of completed house sales this year will reach around 1.1 million. However, the lengthy time required to complete a sale after finding a buyer remains a challenge for both agents and movers. On average, it takes five months between agreeing a sale and legal completion. Overall, it takes more than seven months from a seller coming to market to completing their move. Therefore, sellers hoping to celebrate Christmas in a new home should consider entering the market now.
In a positive development for the mortgage market, HSBC UK, Barclays, and TSB cut their mortgage rates last Friday.
These findings were released alongside a report from property firm Hamptons, which indicated that tenants renewing existing contracts in Britain typically saw their rent rise by an average of 8.3% over the 12 months to April, outpacing the 6.4% rental growth on newly let properties.
Aneisha Beveridge, head of research at Hamptons, explained, “Over the last two years, strong rental growth on the open market has meant that the gap between market rates and what some tenants were paying rose significantly. The large gap between market rates and what many tenants are paying is a big disincentive for them to move unless they have to. Moving increasingly means getting less home for more money. While time will eventually close the gap between what sitting and new tenants are paying, it may take longer if rental growth on the open market starts picking up again.”
As the market continues to evolve, prospective buyers and tenants alike are advised to stay informed about these trends and plan their moves accordingly.
