This time of year is the busiest season for the housing market. Lots of people kick start their moves when the days get longer and the weather starts to warm up.
And because new sellers know they may have more potential buyers viewing their home, we often see asking prices edge up by around 1% at this time of year. But we’ve actually seen prices rise by almost double that this month. The average asking price for a home in Great Britain has increased by 1.8% in May, which has pushed prices to a record high of £372,894.
This larger than usual monthly increase follows lots of speculation about what might happen in the housing market this year. Towards the end of 2022 and at the start of this year, we saw some people pause their moving plans.
There was uncertainty around what could happen to mortgage rates as a result of what’s happening in the wider economy, including changes to the Bank of England’s Base Rate, and how this might affect house prices. You can check the current UK mortgage rates and what they could mean for monthly repayments here.
But this month we’ve see demand from potential home-buyers continue to exceed the levels during the same period before the pandemic, with 3% more people enquiring to view properties for sale.
Our property expert, Tim Bannister, says: “This month’s jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. One reason for this increased confidence may be that the gloomy start-of-the-year predictions for the housing market are looking increasingly unlikely.”
“What’s much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional home-moving activity of the pandemic years,” he adds.
What’s happening in your local area?
Because our monthly House Price Index is based on the largest and most up-to-date sample of homes for sale, we’re able to identify any changes to the housing market in real time. Our House Price Index gives a picture of what’s happening at a national scale, but also at a more local level. You can check what’s happened to house prices in the region where you live in our latest report.
What does this mean if you’re thinking of selling your home?
We’re now in a much steadier housing market than we have been in recent years. If you’re looking to put your home on the market soon, the guidance from estate agents is to make sure it’s priced right first time, to avoid the need for a reduction later. Homes that are priced in line with the current market trends are the ones that are getting interest from buyers.
“The market is still very price-sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically-priced new instructions that are selling best,” Tim adds.
And what if you’re a first-time buyer?
We’ve seen the average rates for fixed-rate mortgages steadying over recent weeks, and demand for first-time buyer-type homes up 6% when compared to the same period in 2019. If you’re thinking of buying your first home but aren’t sure where to start, our guide to buying a home is a good place to start.