The average price tag on a home has hit a record high for the second month in a row – with sellers asking nearly £380,000 on average in May, according to a property website.
Across Britain, the average asking price for a home coming on the market jumped by £2,335 or 0.6% month-on-month in May, Rightmove said.
It took the average asking price to a record £379,517 in May, with April also having been a record high for asking prices.
Asking prices have reached new record highs in the month of May for the past five years.
But Rightmove said that prices this month have risen more slowly than usual, following a stamp duty deadline stampede earlier in the year.
After a busier-than-usual March, new buyer demand slowed in April to 4% below the same month in 2024. Stamp duty discounts became less generous for some home buyers from April. Stamp duty applies in England and Northern Ireland.
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% 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. Working with your estate agent to understand your local market and coming to market with a tempting price will give you the best chance of standing out.”
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.”
David Johnson, managing director of property consultancy Inhous, said: “Property prices in central London are seeing a slight adjustment which is predominantly caused by an influx of wealthy investors deciding to sell up.
“Savvy house hunters are ceasing this opportunity to enter price negotiations and secure a property in areas such as Belgravia, Knightsbridge or Chelsea below asking price.”
Rightmove’s research was released as another report, from property firm Hamptons, estimated that in the north west of England, nearly two-thirds (63%) of new flats were sold off-plan last year – the highest figure for any region in England and Wales and the first time since 2007 that any region saw more flats sold off-plan than London.
