New seller asking prices rose by an average of 0.6%, or £2,335, this month to hit a new record of £379,517, new data from Rightmove has revealed.
However, this month’s seasonal price increase is the lowest at this time of year since 2016, as the decade-high number of homes for sale limits price growth.
Along with the smaller-than-usual price increase, there has been a dip in new buyer demand following April’s stamp duty increase.
Asking prices hit record high despite lull in new buyer demand – London Wallet
Industry reactions:
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The recent base rate reduction seems to have made little or no difference to the approximately four out of five of our sellers who are also buyers . Most are concentrating on the difference between sale and purchase price rather than the headline figure achieved, particularly while activity remains relatively subdued and buyers are in charge.
“However, this latest Rightmove survey shows that some sellers are still not getting it as a significant proportion of asking prices remain stubbornly high. Offers received now may be the best available for some time bearing in mind the significant choice available.
“Fortunately, most sellers are negotiating as hard as they can and are aware of the consequences of missing out.”
David Johnson, MD of INHOUS, commented: “Buyer demand picked up immediately after the bank holidays and has remained strong throughout May. This level of buyer motivation is resulting in the majority of sellers receiving multiple offers and achieving their asking price. One and two bedroom apartments are particularly sought-after as well as larger family homes in and around commuter hotspots. 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.”
Toby Leek, president of NAEA Propertymark, stated: “It’s no surprise that April saw a lull in market activity as many of those who wanted to move home, did so before Stamp Duty increased from 1 April. However, prices and the market long term remain resilient and with improved mortgage products now being introduced, buyers are finding extra room in their finances, keeping the cogs of the housing market rotating, and in turn, the wider economy too.
“Alongside this, sellers must do their research and market their home with an experienced agent who is less likely to overprice and push for a realistic and timely sale.”
David Gardner, MD at DDM Residential, remarked: “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. Sellers who are pricing realistically are seeing the best results, often achieving quicker sales. Buyer confidence is definitely improving, but value sensitivity is still key. It’s a promising sign that activity is picking up after a post-stamp duty increase lull.”
Tom Bill, head of UK residential research at Knight Frank, said: “Asking prices need to reflect the fact that buyers have a lot of property to choose from this spring. Supply has been boosted by landlords selling up due to tougher regulations on the horizon, owners who attempted to act ahead of the stamp duty deadline and vendors who reactivated plans put on hold last year due to the election and Budget. Meanwhile, buyers are hesitant due to domestic and global economic concerns, creating an imbalance that signals downwards pressure on prices in the short term. However, the interest rate environment should continue to improve and looser mortgage lending rules should underpin demand later this year. We expect 3.5% average UK price growth in 2025.”
Polly Ogden Duffy, Managing Director at John D Wood & Co, said: “Nationally there is an increase in property supply unmatched by an increase in number of buyers. In London, some discretionary sellers and buyers are pausing as the impact of political and economic headwinds take time to settle. 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. Sensible pricing will be key to attracting committed, proceedable buyers in today’s market. That said, there is a compelling opportunity to buy and either upsize or get onto the property ladder. The breadth of choice, softer competition, an interest rate drop, and Easter firmly behind us, may offer a clearer runway to secure a home this summer.”
Tomer Aboody, director of specialist lender MT Finance, added: “With higher supply of stock for sale than in recent months, buyers have been more spoilt in choice which is reflected in the lower growth in asking prices this month.
“As interest rates reduce, we should see affordability increase which in turn will encourage buyers to be active. This should produce a more buoyant market with higher transaction levels.
“In the meantime, buyers and sellers may well take stock of the current economic climate and wait and see before making their move. If there is another rate reduction in the latter half of the year, we could see a big rush in activity in the final quarter.”
Asking prices hit record high despite lull in new buyer demand
