Yahoo Finance UK house prices hit record high in May
The price of homes being put up for sale reached a record high of £375,131 in May, according to Rightmove. Across the country, the price of a property coming to market rose 0.8%, or £2,807, month-on-month.
It is the fifth month in a row in which asking prices have risen, according to Rightmove's index.
However, that only leaves average asking prices 0.6% higher than a year ago.
Pent-up demand from would-be buyers who paused their plans last year is a key driver behind increased home mover activity despite mortgage rates remaining elevated for longer than anticipated, the property site said.
Sales agreed have also risen 17% in the first four full months of this year compared to last, despite the Bank of England maintaining interest rates at 5.25% since last August.
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Tim Bannister, Rightmove’s director of property science, said: “The momentum of the spring selling season has exerted enough upwards price pressure to reach a new record asking price.”
Rightmove anticipates the number of completed house sales this year to reach around 1.1 million, but it said the lengthy time to complete a sale after finding a buyer remains a challenge for both agents and movers.
May is typically a strong month for price growth, with new price records having been set in May in 12 of the previous 22 years, the report said.
"The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched," Bannister added.
Price growth is being driven by the top-of-the-ladder properties, where asking prices are 1.3% higher than last year. These properties tend to be less sensitive to high mortgage rates.
The report said that it is taking 62 days on average to find a buyer before the legal process of selling the house even begins. Those hoping to sell their home and move before Christmas should start taking action now.
The average time between agreeing a sale and legal completion is five months. In total, it is taking more than seven months on average from a seller coming to market to completing their move.
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“It may seem surreal to be thinking about Christmas in May, but we know that many would-be sellers picture celebrating the festivities in a new home, and to achieve that, now is the time to be coming to market,” Bannister said.
“One strategy that is still giving some sellers the edge in this price-sensitive market, is working closely with an estate agent to price attractively right at the start of marketing, to give themselves the best chance of finding a buyer quickly,” he added.
The findings were released as property firm Hamptons said red hot rental market in the UK is prompting tenants to stay in properties and renew their contracts rather than move, as the costs associated with a new house mean paying an average of £178 per month more.
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