The UK housing market is continuing to hold up far better than many expected despite the mounting global uncertainty, with asking prices recording a stronger-than-usual spring uplift and buyer activity remaining relatively resilient even as mortgage costs remain elevated, according to the latest figures from Rightmove.
The portal’s May House Price Index reveal the average asking price of a newly listed home rose by 1.2% this month to £378,304, exceeding the typical 10-year May increase of 1.0%.
Although annual prices remain 0.3% lower than they were a year ago, the stronger monthly rise suggests confidence among buyers and sellers has remained more robust than expected during a period dominated by geopolitical tensions, inflation pressures and higher borrowing costs.
And that robustness is clearly evident in transaction volumes. Rightmove says the number of sales agreed is currently running just 4% below the same period last year, when mortgage rates were materially lower, and activity remains 2% ahead of 2024 levels.
Asking prices pick up in spring selling season
Colleen Babcock, Property Expert at Rightmove, says: “It’s normal to see asking prices pick up as we move through the spring selling season. What’s notable this month is that activity in the market is staying fairly steady, even with ongoing cost-of-living pressures and wider global uncertainty.”
However, beneath the resilient national picture, affordability pressures are continuing to result in markedly different conditions across the country.
As has been the case for some time, the strongest annual price growth is occurring in the lower-priced northern regions. The North East has recorded annual asking price growth of 2.7%, closely followed by the North West at 2.6%. In contrast, prices in London fell by 2.4% year-on-year, and there was a 1.6% decline in the South East.
Buyers sensitive to affordability
The figures suggest buyers are highly sensitive to affordability, particularly in areas where higher mortgage costs have had the biggest impact on borrowing power.
The first-time buyer sector has also remained relatively resilient despite continued affordability issues. Sales agreed are down 4% year-on-year, which is broadly in line with the wider market, while average asking prices for typical first-time buyer homes are now 0.7% lower than a year ago.
Rightmove said this is the result of affordability adjustments increasingly happening through pricing rather than through any sharp fall in buyer demand.
Supply levels rising
Supply levels are also continuing to rise. The number of homes for sale is now at its highest point for this time of year since 2015, giving buyers more choice and increasing competition between sellers. Rightmove says 32% of existing listings have already undergone at least one price reduction.
In addition, homes that later require a reduction are taking far longer to secure buyers. The data shows that properties which undergo a price cut spend an average of 127 days on the market, compared with 36 days for homes priced correctly from the outset.
On the plus side, there has also been some modest relief on mortgage pricing. The portal’s daily mortgage tracker shows the average two-year fixed mortgage rate has fallen to 5.18%, down from 5.42% a month earlier, helping reduce average monthly mortgage payments by around £50.
Matt Smith, mortgage expert at Rightmove, said small falls in mortgage rates were beginning to improve affordability and support confidence among buyers who had delayed moving decisions.
