According to the house price index from Rightmove, the average British house price reached a record high of £357,131 in May. Month on month, the average prices of properties arriving on the market rose by £2,807, or 0.8%.
The property website’s report stated that pent-up demand from potential buyers who put their plans on hold in 2023 is one of the main reasons behind the increased activity, despite mortgage rates remaining higher than expected.
Compared to the same period last year, the number of sales agreed between January and April grew by 17%.
Rightmove also reported that May is traditionally a strong month for price growth, with new price records being set in May in 12 of the past 22 years. Average house prices are now 0.6% higher than the previous record, which was set in May 2023.
Rightmove’s Director of Property Science, Tim Bannister, said: “The momentum of the spring selling season has exerted enough upwards price pressure to reach a new record asking price.”
The property website anticipates complete house sales figures to reach around 1.1 million in 2024, although agents and movers will still have to overcome the challenge posed by the lengthy amount of time it takes to complete a sale once a buyer has been found.
On average, it currently takes 5 months between agreeing a sale and legal completion. From a seller coming to market to completing their move, takes an average of 7 months. Any buyers hoping to move into their new home by the end of the year would ideally need to come to market now.
The Rightmove report follows hot on the heels of mortgage rate reductions announced by TSB, Barclays and HSBC at the end of last week.
It also arrives as property firm Hamptons revealed that tenants renewing an existing rental contract saw rents rise by an average of 8.3% over the past year to April, which is faster than rental growth on a newly let property, which stands at 6.4%.
Hampton’s Head of Research, Aneisha Beveridge, said: “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.”
