Asking prices for homes in Britain have reached a record high for the second consecutive month, with sellers seeking nearly £380,000 on average in May, according to property website Rightmove.
The average asking price for a newly listed home rose by £2,335, or 0.6 per cent, in May, pushing the typical price tag to a new peak of £379,517.
This follows another record high set in April, continuing a five-year trend of escalating asking prices during the month of May.
However, Rightmove notes that the pace of price growth has moderated compared to the surge witnessed earlier in the year, likely influenced by the conclusion of the stamp duty holiday.
After a busier-than-usual March, new buyer demand slowed in April to 4 per cent below the same month in 2024.
Stamp duty discounts became less generous for some home buyers from April.
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However, demand in the year to date is still ahead of last year, and there are early signs of a bounceback in May, Rightmove said.
It suggested that some new buyers may have been holding out for May’s Bank of England base rate decision.
The volume of sales being agreed in the past month is 5 per cent higher than at this time last year, indicating that buyers are being tempted by a widened choice, the website added.
The number of new properties coming onto the market for sale is ahead of this time last year.
Mortgage rates will be crucial in determining the level of buyer activity for the rest of the year, Rightmove said.
Mortgage rates have been trickling downwards, and there is hope that the recent Bank of England base rate cut may spur on further reductions from lenders, the website added.
Colleen Babcock, a property expert at Rightmove, said: “Despite April’s dip in new buyer demand, there are early signs of a bounceback in May.
“Mortgage interest rates are lower than they were at this time last year, and the recent (Bank of England base rate) cut also gives us some optimism for further mortgage rate drops that will enable more to buy.
“While we’re not expecting drastic reductions, any lowering of rates will be a boost to buyer sentiment and affordability.
“With a high number of sellers and a small dip in buyer demand, it’s worth reminding people out there thinking of coming to market that they need to work hard to attract buyer attention.”
David Gardner, managing director at DDM Residential in Lincolnshire, said: “We’re seeing strong agreed sales across northern Lincolnshire, currently tracking notably higher than May 2024.
“This uptick is driven by improved stock availability and more favourable mortgage rates. However, the market remains competitive.”
Polly Ogden Duffy, managing director at property firm John D Wood & Co, said: “In London, some discretionary sellers and buyers are pausing as the impact of political and economic headwinds take time to settle.”
She added: “Pricing strategy is critical right now. With an increased supply of homes for sale buyers can be more selective, and overpricing – unless your property is truly exceptional – is a fast track to stagnation.”
Andrew Groocock, chief operating officer of the estate agency business at Knight Frank, said: “Buyers are able to take their time at the moment because they have so much to choose from.
“That sort of competition means sellers need to get the asking price right when the property is first launched.
“Even after a reduction, the risk is that a property has already become stale in the minds of buyers, which means it can then take longer to sell or the chances of it falling through are higher.”
