New seller asking prices rose 0.6% (+2,335) this month, with a new record of £379,517, according to the latest RightMove home price index.
Now, we have seen May price records over the past five years, but RightMove data shows that the seasonal price increase this month is the lowest in a year since 2016, as the number of homes sold for 10 years limits the price increase.
At this time last year, the number of new properties on the market was 14%
In addition to less than the price increase, demand for new buyers has also declined after April’s increase in stamp duty and a very busy parade.
With new seller activity exceeding new buyers’ demands, RightMove recommends some flexibility in price expectations to enable sales.
Rightmove said the latest bank price cuts can drive buyers’ affordability and activities from a buyer’s affordability perspective. Rightmove’s weekly mortgage tracker shows that the lowest two-year fixed mortgage rate is now 3.72%, down from 4.75% last year.
Comment Latest Data RightMove property expert Colleen Babcock said: “This is another new price record for this month, but after the May price record for the past five years, given the slowdown in demand for new buyers.”
She added: “In the current market, buyers are likely to have several similar homes to choose from in their area, and this one doesn’t seem to look at it again compared to competition. The price increase this month was the lowest in May of the year, which is a sign of a favorable market for buyers and a more comfortable than usual.”
Jeremy Leaf, a North London real estate agent and former RICS resident chairman, said: “The recent reduction in base rates seems to have little impact on about four-quarters of sellers who are also buyers. Most people focus on the difference between sales and purchase prices rather than reaching the difference between headlines, especially the titles obtained in the event, which is still relatively tired and responsible for the buyer.
“However, this latest RightMove survey shows that some sellers still haven’t got it because a large portion of the asking price is still high. The offer you receive is probably the best fit for some time, remember the big options available.”
Financial Director Tomer Aboody commented that as interest rates drop, we should see an increase in affordability, which in turn will encourage buyers to be active. This should create a more buoyant market with a higher level of trading.
“At the same time, buyers and sellers are likely to take stock of the current economic environment and wait and see before taking action. If there is another reduction in the second half of the second half of the year, we may see a lot of activity in the last quarter.”
