House prices hit new highs amid Spring selling surge
New figures from Rightmove’s House Price Index show the average price of properties listed for sale increased by 0.8% this month.
The month of May holds various positives. Typically, it is the time in England when the weather starts to improve, flowers begin to blossom and the days get longer. However, new data from Rightmove’s House Price Index also shows this month to be a particularly good time for house sales. Experts have uncovered that this month, the average price of a home rose to £375,131, which is an increase equivalent to £2,807.
According to professionals from Rightmove, the increase has happened as a result of the Spring selling season – May is often a popular time when people decide to buy a house, as new records have been set in 12 of the past 22 years.
Tim Bannister, director of property science at Rightmove, said this news is especially encouraging as various industry experts believed the property sector would struggle after the Bank of England hiked interest rates up to 5.25%.
‘Some predicted that property prices would suffer sharp falls and take a while to recover following the Bank of England increasing the vase rate up to 5.25%, where it has remained since august 2023,’ Tim said. ‘However, the momentum of the Spring selling season has exerted enough upwards price pressure to reach a new record asking price.’
Tim added: ‘From a regional perspective, the North East, with the cheapest average prices in Great Britain, has seen the strongest price growth. However, it’s important to remember that prices overall are still only 0.6% ahead of this time last year. The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many homebuyers is still stretched.’
In addition to showcasing a rise in property prices, the data also displayed that increased buyer and seller activity has been driven by pent-up demand, despite continued high mortgage rates. Sales agreed between buyers and sellers in the first four months of the year are up 17% compared to the same period in 2023, outpacing a 12% rise in new listings.
Daniel Austin, CEO at ASK Partners, said: ‘The property sector is recovering. Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential.
‘In the realm of commercial real estate, factors like physical condition, location, and age significantly influence a property’s value. Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors. In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations.’
Echoing a similar tone, Aaron Milburn, UK managing director for Pepper Advantage, claimed it is likely the trend of increased house prices and buyer-seller activity will continue.
‘Growth in house prices looks set to continue, according to Rightmove this morning. This would appear to complement our recent findings that mortgage arrears growth is slowing to its lowest rate since September 2022’s Mini-Budget and the mortgage market is showing some signs of improvement,’ Aaron said. ‘However, today’s figures contrast with those from Nationwide’s survey earlier this month which observed the average asking price of a home going in the opposite direction.
‘This discrepancy highlights that the state of the housing and mortgage markets is not the same across the whole of the UK, with disparity between regions. Similarly, we found that the arrears growth rate increased during Q1 for both the North East and North West regions while other areas, including the South East and Greater London, decreased. Even with green shoots appearing, the economic picture remains complex, and certain groups remain under pressure and will likely require support for some time.’
Overall, Rightmove predicts around 1.1 million completed sales transactions will occur this year. However, due to the house buying process still taking around five to seven months to complete, Rightmove have stated that to achieve this target by Christmas, people who are considering buying a property should act now.
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